How Will Meta Stop Crypto Scams? 6 Senators Would Like to Know.

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Bernie Sanders and Elizabeth Warren were among the US senators who sent a letter to Meta Platforms CEO Mark Zuckerberg. Alex Wong/Getty Images

Six US senators sent a letter to Meta Platforms CEO Mark Zuckerberg to request information about the companys efforts to combat cryptocurrency scams.

In the letter, the senators state their concerns over the amount of crypto scams that take place on Metas (ticker: META) platforms, including Facebook, Instagram, and WhatsApp, calling Metas sites hunting grounds for scammers.

It was signed by Sens. Robert Menendez (D., NJ), Sherrod Brown (D., Ohio), Elizabeth Warren (D., Mass.), Dianne Feinstein (D., Calif.), Bernie Sanders (I, Vt.), and Cory Booker (D, NJ).

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, the letter, dated Thursday, said.

It also cited data from the Federal Trade Commission that from Jan. 1, 2021, through March 31, 2022, 49% of fraud reports to the FTC involving cryptocurrency said that the scam originated on social media.

The letter added that 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.

The scams come in multiple forms, including investment and romance scams, and have cost victims in total about $417 million, the letter said.

The senators asked for Zuckerberg to respond by Oct. 24 to a list of questions regarding how the company fights crypto scams on its platforms.

Scam ads breach our ad policies and harm our business by negatively affecting peoples experiences, Meta said in an emailed statement to Barrons. The people behind scam ads use various methods and channels to reach victims across the internet, and we invest substantial resources to detect and prevent scams on our platforms.

This isn’t the first time this summer that a discussion of financial scams on social media has made its way through the investment world. The North American Securities Administrators Association recently issued an investor advisory that warned people to be careful, and highlighted some online scams that have been taking place, including in the crypto space.

Shares of Meta finished up 4.4% Friday at $169.15 eachafter falling 50% this year, while the S&P 500 gained 1.5%. Bitcoin the worlds largest cryptocurrency, rose above $21,000 on Friday.

Write to Angela Palumbo at [email protected]

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