Libra Fakes Undermine Facebook's Charm Offensive on Cryptocurrency

Facebook found and removed many of the fakes, but only after The Post alerted and requested comment from the company.

By Cat Zakrzewski, The Washington Post | Updated: 25 July 2019 11:52 IST

Libra Fakes Undermine Facebook's Charm Offensive on Cryptocurrency

Facebook is trying to rebuild trust in Washington as it seeks the go-ahead to launch a new cryptocurrency. But a recent wave of fake accounts pretending to sell or represent the still-unavailable Libra could undermine efforts to win over lawmakers and regulators.

The Washington Post discovered about a dozen fake accounts, pages and groups spread across the services purporting to be official hubs for the digital currency. In some cases, the hoaxers offered to sell Libra at a discount if viewers visit potentially fraudulent, third-party websites. Facebook found and removed many of the fakes, but only after The Post alerted and requested comment from the company.

Sen. Mark Warner, D-Va., said in an interview, "This is another strong indication Facebook should take a very cautious approach to Libra and commit not to launching any product until US regulator concerns are satisfied."

Facebook also needs to build confidence among consumers who might be wary of using the platform for financial transactions. The fact that its own platforms are already being exploited to undermine Libra shows just how difficult it might be for Facebook to fight fraud and disinformation.

"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," Eswar Prasad, an economics professor at Cornell University, said in an interview. "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."

Facebook has struggled in recent years to police its platform for other types of disinformation, particularly related to elections and healthcare. As the company moves into cryptocurrency, it's treading into a market that is ripe for fraudsters and scammers to target, said Svitlana Volkova, a Pacific Northwest National Laboratory senior scientist who has researched how people talk about digital currencies on social media. She said the fake pages and scams could pose a major risk to Facebook investors and Libra partners.

"Of course cryptocurrency is a very fruitful topic for adversaries to spread disinformation," Volkova said in an interview. "It's very dynamically changing like our political environment," and like political disinformation can have a "real-world" and "large scale" impact. Facebook has been increasingly investing in artificial intelligence and hiring human content moderators to better control harmful content, including disinformation. "Facebook removes ads and pages that violate our policies when we become aware of them, and we are constantly working to improve detection of scams on our platforms," company spokeswoman Elka Looks said in a statement.

But observers noted it was ironic that the social network could not police information about its own products and services on its platform. Many of the fakes we found included Facebook's logo, photos of Facebook chief Mark Zuckerberg or Libra's official marketing image. From Ashkan Soltani, a former Federal Trade Commission chief technologist:

Given Facebook's investments in content moderation and artificial intelligence, Volkova said the company should have the resources to detect bad information about its products on its own platform. However she said the company has not been transparent about how those algorithims work.

"We've seen the implications of disinformation spreading across social networks," she said. "I don't think I have to sell you on the importance of identifying and actually doing something."

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