Facebook didn’t know about Libra scams taking place on its platform

Facebook challenges Bitcoin with Libra

Facebook just can’t seem to get itself out of hot water. From data misuse scandals to fake news to government hearings, the company has recovered from one setback only to fall right into another. However, after announcing plans for its new cryptocurrency, Libra, Facebook finally seemed ready to put controversy behind it.

Unfortunately, it appears the Mark Zuckerberg-led company still isn’t quite mature enough to be handling finances for the masses. Since the Libra announcement, scammers have flooded the social media platform. Multiple deceptive accounts are posing as official representatives of the currency. Ironically, Facebook didn’t even know about the issue until The Washington Post pointed it out.

Fake News

In the past week, users found a dozen fake Facebook and Instagram accounts that advertised themselves as official Libra outlets. While they generally did nothing but spread misinformation, some tried to lure users to fraudulent websites with the prospect of selling the cryptocurrency at a discount.

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It’s important to remember that Libra is far from being available to the public. Perhaps more alarming than the fake Facebook pages though is the fact that several of them were promoted or sponsored content. This means that somehow, they slipped through the cracks of Facebook’s ad center, and the company actually made money from the scams.

Until The Washington Post alerted Facebook to the spread of these fake accounts, they ran rampant across the platform. The company reportedly didn’t know about the bogus accounts, but once it was aware, it eventually removed them. However, it seems the action is too little, too late for the social media giant.

Comedy of Errors

By offering cryptocurrency, Facebook wants users to trust it with their hard-earned money. Even with its painfully poor track record of handling information, people were still very excited about the company’s Libra announcement.

Since then, government legislators have called to halt the digital coin’s launch. Meanwhile, other critics suggest that Facebook is not ready to handle such a serious undertaking. The recent scandal surrounding the Libra scams certainly seems to prove those naysayers right.

Cryptocurrency enthusiasts agree that the point of using the technology is to take financial power away from a central institution and divide it among users. However, Facebook’s inability to monitor its own platform for misinformation is a bad sign. After all, if it promises to run a cryptocurrency exchange, users need to trust that they are buying and selling through a secure source.

In the words of Eswar Prasad, an economist at Cornell University, “There is a deep irony here in Facebook being used as the platform that could undermine trust in the currency Facebook is trying to build trust in.”

Perhaps temporarily stalling Libra’s release isn’t a bad idea after all—at least until Facebook can get its act together. When and if that will happen remains to be seen. Until then, users should keep a careful eye on this situation before deciding to trust Facebook with their savings.