US lawmakers call on Mark Zuckerberg to tackle crypto scams

By: Mark Jessy

September 10, 2022 6:10 AM

In June, the FTC released a report detailing the prevalence of crypto fraud on social media platforms, with Facebook, Instagram, and WhatsApp all receiving high marks.

Meta CEO Mark Zuckerberg has reportedly been asked by a group of Democrats in the United States Senate to elaborate on the social media giant's policies regarding cryptocurrency fraud.

The Washington Post reported on Friday that Senators Robert Menendez, Sherrod Brown, Elizabeth Warren, Dianne Feinstein, Bernie Sanders, and Cory Booker had asked Zuckerberg about possible steps the company could take to detect crypto scams, coordinate with law enforcement, and help victims of fraud. Facebook, WhatsApp, Messenger, and Instagram are all under Meta's control right now.

According to the reports, the group of senators said something along the lines of, "Based on recent reports of scams on other social media platforms and apps, we are concerned that Meta provides a breeding ground for cryptocurrency fraud that causes significant harm to consumers."

Legislators pointed to a June report from the Federal Trade Commission that called social media and cryptocurrency a "combustible combination for fraud." The FTC found that roughly half of the $1 billion worth of crypto-related scams in 2021, the vast majority of which were focused on investments, originated from social media platforms.

"Nearly $4 out of every $10 lost due to social media-based fraud was in cryptocurrency, significantly more than any other payment method. Instagram (32%), Facebook (26%), WhatsApp (9%), and Telegram (7%) were named as the most popular social media platforms."

The Democrats in the Senate also requested that Meta provide alerts about potential scams in languages other than English. According to a report from October, Meta spokesperson Andy Stone said the social media firm invested "substantial resources to detect and prevent scams," and lawmakers have asked Zuckerberg to respond with detailed information by October 24.

In a similar notice issued in July, the Federal Bureau of Investigation (FBI) of the United States warned the public about crypto scams, specifically apps that mimic legitimate businesses by using their logos and other identifying information. Similarly, many naive users have fallen for scams on Twitter and YouTube thanks to compromised accounts, fake websites, and fake crypto projects and airdrops.