Meta Platforms under fire over crypto scam prevention mechanism

American media magnate Mark Zuckerberg has recently received a letter from a group of Democratic senators that demands the efforts taken by his company Meta Platforms to combat crypto scams on its social media platforms Facebook, Instagram, and WhatsApp.

New Jersey’s Bob Menendez-led group of senators included Ohio’s Sherrod Brown, Massachusetts’ renowned senator Elizabeth Warren, California’s Dianne Feinstein, New Jersey’s Cory Booker, and Vermont’s Bernie Sanders.

Meta would have to provide detailed answers by Oct. 24

The September 8-dated letter from six senators from the Senate Banking Committee requested detailed answers in writing to a series of questions by October 24, 2022. They questioned Meta about its policies for locating and removing crypto scammers from its social media sites, the verification process of crypto ads to prevent scammy ones, strategies for removing scammers from its platforms, how the company is cooperating with law enforcement to track down scammers, among others.

The senators showed concerns on the increasing crypto frauds across social media platforms with Meta’s sites particularly being popular hunting grounds for fraudsters. The letter reads:

“Among consumers who reported being scammed out of cryptocurrency on a social media website, 32% identified the scam as having originated on Instagram, 26% on Facebook, and 9% on WhatsApp.”

Moreover, the Federal Trade Commission’s data shows that from January 1, 2021, to March 31, 2022, crypto scams resulted in a loss of $417 million to the investors. Recently, as TheCoinRise reported, the United States Economic and Consumer Policy subcommittee demanded inquiry into crypto scams.

Meta, which filed eight Web3 and crypto-based trademark applications with USPTO, has been facing serious scrutiny by the regulators in the past year. The Australian Competition & Consumer Commission announced in March that it was taking legal actions against Meta on the grounds that the company had fooled Facebook users by posting adverts for cryptocurrency schemes that included local public personalities who were not aware of the contents.