Blog: Senators seek information from Meta CEO on combating cryptocurrency scams – Financial Regulation News – Financial Regulation News

A group of U.S. senators is seeking information from Meta CEO Mark Zuckerberg about the company’s efforts to combat cryptocurrency scams on its platforms and hold bad actors accountable.

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The senators, including U.S. Sen. Bob Menendez (D-NJ), Sherrod Brown (D-OH), Elizabeth Warren (D-MA), Dianne Feinstein (D-CA), Bernie Sanders (I-VT), and Cory Booker (D-NJ), said that scams involving cryptocurrency are becoming increasingly prevalent on social media, according to the Federal Trade Commission (FTC).

“From January 1, 2021, through March 31, 2022, 49 percent of fraud reports to the FTC involving cryptocurrency specified that the scam originated on social media,” the senators wrote to Zuckerberg, the CEO of Meta, formerly known as Facebook. “Alarmingly, these scams cost consumers a staggering total of $417 million and take many forms, from ‘investment scams’ where consumers are promised huge returns and have their investments stolen, to ‘romance scams’ where fraudsters create fake profiles to build a relationship with their targets before scamming them.”

The senators said Meta’s sites are particularly popular hunting grounds for scammers. Of those who have reported being scammed out of cryptocurrency on social media, 32 percent identified the scam as having originated on Instagram, while 26 percent were scammed on Facebook and 9 percent were defrauded on WhatsApp.

“Meta has previously acknowledged the potential for crypto scammers to operate on its platforms. In fact, in January 2018, Facebook banned crypto ads, claiming that ‘there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.’ At the time, you claimed this policy was meant to ‘make it harder for scammers to profit from a presence on Facebook,’” the senators wrote. “This ban clearly shows that you understand the risks posed by this type of content to users. You later partially reversed the ban on crypto ads and more recently expanded the list of regulatory licenses accepted in order to advertise cryptocurrency on Facebook and Instagram. A higher level of scrutiny is needed for this type of content.”

The senators asked Zuckerberg to respond to a series of questions about what the company is doing to deal with cryptocurrency scammers on his social media sites. Responses are requested by Oct. 24.

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