YouTube added to defendants in BitConnect fraud class-action
A third amended complaint has seen YouTube added as a defendant in the ongoing BitConnect fraud class-action.
A third amended complaint in the lawsuit was filed on July 3rd.
In addition to BitConnect as a corporate identity and several individual defendants, YouTube has now also been added.
The issue taken with the video platform is its partnership with top BitConnect investors.
Several of the Affiliate Promoter Defendants had partnerships with YouTube pursuant to which BitConnect disseminated fraudulent and harmful content to unsuspecting victims across the globe.
YouTube was negligent in failing to warn those victims of the harmful content for which YouTube compensated their creators and publishers.
The complaint alleges the partnerships YouTube had with BitConnect’s top investors was “profitable”.
Defendants Trevon James and Craig Grant have been particularly active affiliate promoters, primarily by using videos they posted on YouTube wherein they solicited investments for (BitConnect).
Defendant Grant is believed to have generated for himself approximately $5,000,000 of income as a direct result of sponsoring over 12,000 investors — who provided $52,000,000 of investment capital to BitConnect.
Defendant James is believed to have earned for himself around $2,000,000 as a result of approximately 3,000 investors (and nearly $12,000,000 of investment capital to BitConnect) he sponsored — the majority of whom were recruited for “sponsorship” through his videos on, and as a result of his partnership with YouTube.
The lawsuit also pegs the earnings of CryptoNick (Nicholas Trovato) at around $900,000.
The alleged total amount of investment solicited for BitConnect through promotion on YouTube is almost a hundred million dollars.
YouTube is accused of being negligent, by way of failing to ‘warn (the public) that their partners were soliciting investments in … fraudulent Ponzi/pyramid schemes‘.
Upon information and belief, the top ten BitConnect affiliates on YouTube published over 70,000 hours of unedited content, generating 58,000,000 views and luring thousands, if not hundreds of thousands of victims into BitConnect’s fraudulent investment scheme.
Plaintiffs and the Class have asked the court to establish ‘whether YouTube negligently failed to warn Plaintiffs and the Class‘ about BitConnect.
Under well-established partnership law, a partner typically bears the shared burdens of his/her/its partner’s acts if he/she/it had committed those acts himself/herself/itself.
The complaint also acknowledges marketing efforts of BitConnect investors on Reddit, Twitter, Instagram, Craigslist and Facebook.
At the time of publication no other third-party companies besides YouTube have been named defendants.
With respect to “partnership”, while I can’t attest to every owner of a YouTube account that promoted BitConnect, I don’t believe ads were being served on either Craig Grant or Trevon James’ respective channels. That goes for most of the top promoters.
The serving of ads on a channel is typically what’s meant when an individual qualifies as a “YouTube Partner”.
On the other hand what I do take objection to and believe YouTube should entirely be liable for, is the promotion of BitConnect through AdWords.
You know what I’m talking about. The videos where Craig Grant and the rest appear with goofy grins.
“Yo, check out my laptop screen. I just made eleventy billion dollars while jerking off in the Bahamas. Sweeeeeeeeeet!”
Thankfully YouTube banning cryptocurrency ads in general put a stop to the practice, but for at least six months they were prolific.
This reach allowed BitConnect’s top promoters like Grant and Brown to reach far beyond their respective YouTube channels.
They had deeply penetrative access to a platform of over a billion users – and I think YouTube has a case to answer for that.
BehindMLM also serves ads through YouTube’s parent company, Google. If I started promoting Ponzi and pyramid schemes I imagine I’d lose my nearly decade-old account pretty fast.
I’d still be able to publish what I want, I just wouldn’t be able to pair the content with Google’s supplied advertising.
In that sense perhaps a comparison to Blogger is more warranted, seeing as Google owns that platform too.
How long do you think a blog set up to market and promote Ponzi and pyramid schemes would last on Blogger?
If Google is able to police content on Blogger, YouTube shouldn’t be an exception.
The counter-argument to this is of course “Muh free speech! Thought police! Alex Jones!”
To which I’d respond again; If Google already makes decisions regarding their businesses based on the nature of content on other platforms, why should YouTube be exempt?
As I write this a search for “BitConnect” on YouTube still returns 319,000 results.
Granted not all of those are promotional and, fearing regulatory action, tons of videos have been deleted, surely not all 319,000 of those videos are non-promotional?
While I’m still not entirely convinced the Mengesha class-action will be able to hold BitConnect and its top promoters liable, the addition of YouTube as a defendant is certainly an interesting development.