Stephen Wozniak alleges that Youtube and its parent company Google not only failed to shut down videos using his likeness to promote a Bitcoin scam, they also sold targeted advertisements on the videos. (Shutterstock)

Steve Wozniak and 17 others sue Youtube and Google for allowing bitcoin scam

The lawsuit alleges that tech giants promoted and profited from the scam

Steve Wozniak, the co-founder of Apple, sued Youtube and its parent company Google for allegedly allowing scammers to use his name and likeness in fraudulent bitcoin giveaways for months.

In a lawsuit filed Tuesday, Wozniak and 17 other fraud victims alleged that the tech companies failed to protect its users from the scams by failing to remove the videos swiftly and even selling targeted advertisements for the scam.

“They are the only ones in the position that could have stopped this,” Wozniak said at a press conference Thursday. “They even know who’s doing the posting. They’re part of the crime.”

The “Bitcoin Giveaway” scam uses images and videos of Wozniak and others like Elon Musk and Bill Gates to convince Youtube users that the figures are hosting a live Bitcoin Giveaway event. Users can send in their bitcoins in return for twice as much. But they receive nothing back after transferring their cryptocurrency and Youtube users have lost “millions of dollars,” according to the lawsuit.

Wozniak added that he had reported the scams to Youtube. While some of the videos have been removed, new videos of the scam have also appeared. Several videos surfaced on Youtube just Thursday morning, he said. It’s akin to a game of “Whack-a-mole.”

Since the lawsuit was filed, Brian Danitz, one of the attorneys representing the plaintiffs, said people worldwide have called them in hopes of joining the plaintiffs’ action. And the attorneys may file a second complaint against the tech giants.

Meanwhile, the plaintiffs have demanded a jury trial and an injunction for Youtube to stop “hosting, promoting and profiting from these criminally fraudulent videos and promotions,” the lawsuit stated.

A Youtube spokesperson said in a statement: “We take abuse of our platform seriously, and take action quickly when we detect violations of our policies, such as scams or impersonation.”

According to Youtube, it has strict policies of prohibiting such acts and the company has removed more than 2 million videos and deleted over 1.5 million accounts in the first quarter of this year for violating its policies on deceptive practices.

But the lawsuit pointed to Twitter, which acted swiftly after fraudsters targetted 130 accounts of celebrities and public officials like Joe Biden and Elon Musk last week. Scammers offered to send $2,000 for every $1,000 sent to an anonymous bitcoin address. While Twitter shut down the accounts and issued an apology, Youtube “has been unapologetically hosting, promoting, and directly profiting from similar scams,” the lawsuit stated.

Joe Cotchett, another lawyer representing the plaintiffs, accused Youtube and Google for “hiding behind” the Communications Decency Act, a legislation that protects internet speech. In particular, Section 230 of the law protects online platforms that host or republish user content from liability for the content.

Youtube’s alleged participation, however, falls beyond the purview of Section 230 as “the promotions at issue here are blatant criminal conduct that is not even arguably protected by the First Amendment,” the lawsuit stated.

“It’s because of Youtube’s affirmative acts that these people believed this was a live event hosted by Steve Wozniak or by Elon Musk,” Danitz said. “And that’s what induced [people] to give over their bitcoins to these fraudsters.”

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