BitConnect (BCC)–The fallout surrounding the BitConnect ponzi scheme has continued, with media publisher YouTube being listed among the defendants in the class action lawsuit against the now-defunct coin scam.
After being accused repeatedly of operating as a ponzi scheme, BitConnect discontinued operations in January 2018 following a cease and desist order from several financial regulators. However, the currency BitConnect (BCC) was able to accumulate 2.9 billion USD in market cap, with a per-coin value of 470 USD that rapidly plummeted to almost nothing following the closure (amazingly, the coin is still listed with a market cap of 4.3 million USD despite being exposed as an outright scam–a sign of the times).
Promoters of BitConnect were able to make off with millions in Bitcoin (which they bought with BCC on the BitConnect platform), after promising users astronomical returns on their investment. In true to form fashion for a ponzi scheme, the platform operated a referral program with increasing rewards, in addition to a loan system that paid investors interest for lending out BCC. The official website described the process as following,
“The moment you acquire BitConnect Coin it becomes an interest-bearing asset with 120% return per year. It is that simple.”
BitConnect videos were published under a number of promotionary accounts, accruing a cumulative 58 million views over its lifetime that all espoused the benefits of buying into the currency, a la a classic ponzi scheme setup. To put that number in perspective, it’s about the same volume as a new Beyonce music video.
While some have taken the stance that YouTube should not be implicated in the suit, as being the passive bystander of the published content, they neglect the process through which YouTube regularly reviews and censors it’s platform. Ask any proponent of contentious viewpoints across the country, from conservatism to abortion to gun control, and you will find a list of video publishers who regularly have their content de-monetized (which amounts to financial censorship), or outright pulled without a clear description. Popular podcast personality and YouTube lives-streamer Joe Rogan regularly comments on the murky relationship with YouTube demonetization, having certain videos flagged with no differentiation between content aside from the guest involved.
If YouTube wants to remain the ultimate gatekeeper and centralized authority for its content platform, then it also must take responsibility for situations that hurt users. While we can all recognize a degree of self-censorship is necessary (nobody wants to pull up YouTube and be greeted with videos of rape, murder, etc.), YouTube has raised the bar on how it handles the regulation of content–but for whatever reason, neglected to act in the case of BitConnect. As outlined by David Silver, attorney for the plaintiffs in the class action lawsuit, multiple video and complaints were posted to YouTube warning the media giant about the nature of the ponzi scheme being conducted by the BitConnect cadre.
In addition, YouTube benefited directly from the publishing of BitConnect content, via the 58,000,000 million views and 70,000 hours of content being added to the website. As others have pointed out, the number of views accumulated by some of the published accounts should have been enough to qualify for the “enhanced” eligibility standard for YouTube accounts, which has an accompanying stricter vetting process. At the very least, the 58 million views should have triggered a second-look by the YouTube review process, which could have helped stymie the growth of cryptocurrency’s largest ponzi scheme.
As the court-filing document concludes,
“YouTube failed as a gatekeeper to protect its users from, and warn its users of, the very harm YouTube set out to prevent with its advertising protocols and proprietary algorithms.”
Or, as David Silver put it in a response to CoinTelegraph,
“As the old saying goes: Sometimes when you lie down with dogs, you get fleas.”