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Bitcoin Youtube Scam Around Steve Wozniak Sees Apple Co-Founder Win Legal Victory Against Google

Last Updated March 21, 2024 1:32 PM
James Morales
Last Updated March 21, 2024 1:32 PM
By James Morales
Verified by Peter Henn

Key Takeaways

  • In 2020, Steve Wozniak sued Google over Youtube scam videos that used his name and image to defraud victims.
  • The lawsuit was initially dismissed on the grounds that the Communications Decency Act gives Google immunity from prosecution.
  • However, a recent appeals court ruling will give the Apple founder a second chance to argue his case.

Are video platforms legally culpable when they host illegal content? The answer inevitably depends on context. But a recent San Jose appeals court ruling served a major blow to YouTube’s attempts to duck responsibility for hosting doctored videos that scammed people out of Bitcoin.

The decision will give Steve Wozniak  and his co-plaintiffs a second chance to sue YouTube owner Google over videos that used his image to defraud victims using the so-called “Bitcoin giveaway” scam.

Wozniak Gets Second Chance to Sue Over Bitcoin Giveaway Scam

Wozniak argued he suffered reputational damage because of YouTube’s failure to remove videos that used his name and image.  The scam has also used the likeness of Bill Gates and Elon Musk to convince victims to send Bitcoin with the promise that they will receive double in return. 

After the Apple co-founder and 17 fraud victims initially brought their complaint against Google, a lower court ruled that the platform operator had protection under Section 230 of the Communications Decency Act (CDA).

But now, the court of appeals has found that YouTube may have contributed to the scam by providing verification badges to fraudulent video channels. Now, it has kicked the case back to the lower courts for reconsideration.

YouTube Verification Badges May Have Contributed to Scam

According to Google “if a channel is verified, it’s the official channel of a creator, artist, company, or public figure”. However, Wosniak’s lawsuit alleges that channels operated by scammers received verification badges.

Many of Wozniak’s arguments were dismissed on the grounds that the CDA gives Google immunity from prosecution for illegal YouTube content. However, the latest ruling suggests there is a limit to Section 230 protections.

Implications for Section 230

Section 230 was designed to protect internet companies from liability for content hosted on their platforms.

So far, courts have interpreted the federal law as providing platform operators broad indemnity against suits for defamation, libel and other legal claims seeking to hold them responsible for what appears on their sites.

However, the latest appeals court ruling acknowledges verification is a form of content moderation. This, therefore, gives it its own set of liabilities.

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