Cryptocurrency is quickly becoming the “payment of choice” for many online scammers, with about one out of every four dollars reported lost to fraud paid in cryptocurrency, reported the FTC Friday. An agency analysis said consumers reported losing more than $1 billion to fraud involving cryptocurrencies between January 2021 and March 2022. Most of the losses consumers reported -- $575 million worth -- “involved bogus cryptocurrency investment opportunities,” said the FTC. “These scams often falsely promise potential investors that they can earn huge returns by investing in their cryptocurrency schemes,” it said. Reports suggest cryptocurrency scams “often begin on social media,” it said. “Nearly half of consumers who reported a cryptocurrency related scam since 2021 said it started with an ad, post or message on a social media platform.” Adult consumers under 49 “were more than three times as likely as older age groups to have reported losing money to a cryptocurrency scam,” said the FTC. “Older age groups, however, reported losing more money when they did report a cryptocurrency-related scam.”

Disclosures in an April 19 earnings report that Netflix lost 200,000 subscribers in Q1, sending the stock plunging more than 35% in a single day, sparked at least the second federal securities fraud complaint against the streaming company seeking class-action status (see 2205040004). The Cleveland Bakers and Teamsters Pension Fund, a Netflix shareholder, “suffered damages as a result of the federal securities law violations and false and misleading statements and material omissions” made by co-CEOs Reed Hastings and Ted Sarandos, Chief Financial Officer Spencer Neumann and Chief Product Officer Greg Peters, alleged the complaint in U.S. District Court in San Jose that was filed Tuesday and transferred to Oakland Thursday after U.S. District Judge James Donato recused himself. In at least five quarterly earnings calls before April 19, the Netflix executives failed to disclose to investors that subscriber account-sharing and increased competition from other streaming services “were becoming significant headwinds” and that the company was “experiencing difficulties retaining customers,” the complaint said. Netflix didn’t respond to requests for comment.

The “demand environment” for cybersecurity remains “incredibly strong,” said SentinelOne CEO Tomer Weingarten on an earnings call Wednesday for fiscal Q1 ended April 30. Revenue in the quarter grew 109% year over year. Cybersecurity is one of the top tech spending priorities, “and we haven't seen that change despite macro conditions,” he said. “Secular trends,” like digital transformation, expanding attack surfaces and data proliferation, “are driving strong demand for cybersecurity,” he said. “The consequences and risks of not being protected by a leading cybersecurity solution are just too hot.”

Younger consumers are more receptive to tools that encourage brand interaction and communication, and the metaverse allows luxury brands to create community through personalized digital connections, said a Tuesday Colliers luxury retail report. Of potential metaverse participants, 72% showed interest in an Alo Yoga wellness space on Roblox and a Louis Vuitton game with non-fungible tokens (NFTs); 70% were interested in Discord channels for brands including Gucci and Adidas; 67% in Nike’s Nikeland and a Wendy’s virtual food fight; 65% in a Vans’ virtual skatepark on Roblox; 60% in shopping at the U.K.’s Selfridges Electric/City; and 27% in buying virtual Gucci and Balenciaga products on Roblox or Fortnite, Colliers said. NFT sales totaled about $25 billion last year, it said. Despite the hype around the metaverse, “most consumers have never heard of it or do not fully understand its capabilities,” the report said: “As a result the metaverse will remain a niche channel for the foreseeable future.”

Twitter must pay a $150 million fine for violating a 2011 FTC order and “deceptively using account security data for targeted advertising,” the agency said Wednesday. The commission voted 4-0 to refer the complaint and stipulated final order to DOJ. The company requested users’ phone numbers and email addresses to protect accounts but used the data to allow targeted advertising, the agency alleged. The behavior violated a 2011 order that “explicitly prohibited the company from misrepresenting its privacy and security practices,” the agency said. The settlement dates back to 2019, when some personal data “may have been inadvertently used for advertising,” said Twitter Chief Privacy Officer Damien Kieran. “This issue was addressed as of September 17, 2019, and today we want to reiterate the work we’ll continue to do to protect the privacy and security of the people who use Twitter.” The company “will continue to partner with our regulators to make sure they understand how security and privacy practices at Twitter are always evolving for the better,” Kieran tweeted. The $150 million fine ensures Twitter isn’t profiting from the alleged conduct, FTC Chair Lina Khan and Commissioner Rebecca Kelly Slaughter said in a statement. They highlighted that Twitter must notify affected parties and provide users with multifactor authentication tools that don’t require the sharing of their phone numbers. Commissioners Noah Phillips and Christine Wilson issued a statement saying: “We hope that the bipartisan approval of this order, one very much in line with prior orders, signals the beginning of a more constructive dialogue about how to continue refining our enforcement program.”

The 9th U.S. Circuit Court of Appeals should deny Twitter’s request for a rehearing in the company’s lawsuit against Texas Attorney General Ken Paxton’s (R) investigation into Twitter’s decision to suspend then-President Donald Trump for his actions linked to the Jan. 6 Capitol siege (see 2204200051), the state argued Tuesday in 21-15869. A 9th Circuit panel correctly found that Twitter’s claims are “unripe” for review, Texas said. The state noted the two factors the court used in determining whether the case is ripe: “whether the controversy generated is essentially legal in nature or whether further factual amplification is necessary” and whether “postponing review imposes a direct and immediate hardship.” The panel found Twitter failed on the first because “there were factual questions about whether Twitter’s First Amendment rights were implicated,” Texas said. Twitter faced little to no hardship because the company “need not comply with” the civil investigative demand absent enforcement of the CID in a state-court proceeding where “Twitter can raise its First Amendment claims,” Texas said.

FTC Commissioner Alvaro Bedoya announced some of his legal staff on Wednesday. Aaron Rieke will join as chief of staff. Rieke served as an attorney in the FTC's Division of Privacy and Identity Protection and as fellow at the Center for Democracy and Technology before working as managing director at Upturn. Danielle Estrada will work as a consumer protection attorney adviser for Bedoya. Currently working for the Division of Privacy and Identity Protection, Estrada joined the FTC in 2013. Max Miller will work as an attorney adviser for competition. He worked for the past seven years as assistant attorney general on antitrust and consumer protection issues with the Iowa Attorney General’s Office. Catherine Sanchez will also advise Bedoya on competition. She’s worked since 2007 as an attorney in the FTC’s Competition Bureau.

MindGeek and its streaming video services like Pornhub had no role in posting sexually explicit videos of a then-underage girl, and merely providing an online platform that can be used for unlawful purposes isn't illegal or actionable, MindGeek said Monday in a motion to dismiss (docket 2:21-cv-04920) filed with the U.S. District Court in Los Angeles. Suing MindGeek and its executives is the woman who was subject of those videos as well as nearly three dozen Jane Doe plaintiffs alleging videos of their abuse or trafficking when they were juveniles were posted to MindGeek sites. MindGeek said the suit also is barred by Section 230 of the Communications Decency Act. Counsel for the plaintiff didn't comment Tuesday.

Social media companies haven’t successfully argued that their content moderation amounts to “expressive conduct,” Texas argued Tuesday in docket 21-51178 (see 2205090061). Texas Assistant Solicitor General Ryan Baasch highlighted differences between the Texas social media law and a similar law in Florida (see 2205230049). Florida’s hosting obligations are materially different from those under the Texas law, and Florida has made different arguments about editorial discretion, Texas said. The 11th Circuit in its decision in the Florida case didn’t meaningfully explain how social media content moderation policies are materially different from how law schools restricted military access to campuses in Rumsfeld v. Forum for Academic and Institutional Rights (FAIR). The Supreme Court in FAIR found the government could constitutionally block funding from schools if they refused military recruiter access. “In any event, the social media platforms did not advance an argument here that their content-moderation amounts to expressive conduct,” Texas said.

Meta CEO Mark Zuckerberg directly participated in decisions and “lax oversight” of user data that led to Facebook’s Cambridge Analytica privacy breach, Washington, D.C., Attorney General Karl Racine (D) alleged in a lawsuit Monday. This is a follow-up to a lawsuit Racine filed in 2018 against Facebook. Racine’s office reviewed documents produced during litigation of the ongoing suit. “The evidence shows Mr. Zuckerberg was personally involved in Facebook’s failure to protect the privacy and data of its users leading directly to the Cambridge Analytica incident,” he said.