Facebook Libra Inspires a Wave of New Online Scams

Cryptoknowmics  |  Jul 24, 2019


Online criminals are impersonating as the representative of Facebook to lure victims into buying the social media platform’s yet-to-release cryptocurrency, Libra.

According to the Washington Post, scammers lately ran ads through a dozen on fake accounts, pages, and groups across Facebook and Instagram, presenting themselves as the official hubs of Libra. In a few cases, they attempted to sell people the cryptocurrency at discounted rates in exchange for them visiting potentially deceitful, third-party websites.

The Post observed that Facebook was unable to detect those fakes. The social media giant removed the fraudulent ads only upon the media’s alert, highlighting how the technology firm struggled to keep the scammers out of its platform. In response, Facebook spokesperson Elka Looks said they remove ads and pages that meddle with the platform’s policies only when they become aware of them.

“We are constantly working to improve [the] detection of scams on our platforms,” Looks stressed.

But according to Eswar Prasad, an economics scholar at Cornell University, the time of making promises is already in hindsight. He said there is an irony in how scammers used Facebook the social media platform to undermine trust in Facebook the cryptocurrency, adding that people could have a hard time trusting the tech firm.

“Facebook has an enormous worldwide network and enormous financial muscle . . . But the only way Libra will work well as a medium of exchange is if everyone can trust it. And that’s the big question right now: whether there is going to be enough trust in Facebook.”

Lawmaker Issues Statement

Senator Mark R. Warner, one of the lawmakers that questioned Libra’s head David Marcus on Capitol Hill last week, said Facebook’s inability to detect frauds remain a big concern.

“This,” he said on Monday, “is another strong indication Facebook should take a very cautious approach to Libra and commit not to launching any product until U.S. regulator concerns are satisfied.”

Warner also brought to light the high production values of those fake Libra ads. One phony video copied Facebook’s video story format and showed Mark Zuckerberg walking across a stage as he called Libra “safe,” and “the new world’s currency.” The video promised to distribute some 20 million Libra tokens at discounted rates, stating that early investors also received a similar offer.

Libra Becomes a Tough Sell

The latest updates surrounding Libra is likely to bring more troubles for Facebook as the firm tries to woo regulators and lawmakers around the globe. The US Congress last week blasted the cryptocurrency for its potential to replace a public monetary system with a private enterprise. The views, in turn, appeared after the US President Donald Trump and Federal Reserve Chairman Jerome Powell expressed concerns with Libra.

….Similarly, Facebook Libra’s “virtual currency” will have little standing or dependability. If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks, both National…

Earlier this month, Facebook agreed to pay $5 billion in fines for its role in leaking the private data of millions of users.

Author: Davit Babayan

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