Crypto class action against Meta, Google dropped due to ‘conflict of interest’

A self-described serial technology entrepreneur and crypto trader has lost his court fight for compensation from Meta and Google, in a win for the tech giants.

Google and Meta have won a Federal Court fight in Australia. Photo: Josh Edelson / AFP

A self-described “serial technology entrepreneur” and cryptocurrency trader has lost his fight for compensation from Meta and Google after arguing their short-lived ban on cryptocurrency advertising sunk the value of his investment platform.

Federal Court judge Elizabeth Cheesman permanently stayed the class action — which accused the companies of breaching competition law by prohibiting virtual money advertising in 2018 — because its main applicant, Andrew Hamilton, was also funding the case.

Mr Hamilton represented himself in the matter and was also the sole shareholder and CEO of the class action funder JPB Liberty, which entered into a litigation funding agreement with 650 group members who bought “sue Facebook tokens” to pay for the action, a decision handed down late last week stated.

Justice Cheesman said the case should be permanently stayed because, if allowed to continue, it could “bring the administration of justice into disrepute”.

“I am not satisfied that the conflicts inherent in Mr Hamilton’s multifaceted interests in the proceeding are capable of being appropriately managed,” she said in her judgement.

“I accept that a permanent stay is regarded as a tool of last resort, however, I am satisfied that it is required in this proceeding.”

Mr Hamilton, who lives in Israel but studied law in Australia, alleged the “ad ban” — which took place between January and July 2018 — led to a “substantial reduction in demand” for cryptocurrency including Bitcoin, Ethereum and ZCash.

The tech giants argued the case should be thrown out because of Mr Hamilton’s “pervasive conflicts of interest”. Picture: Robyn BECK / AFP

“It is alleged that Facebook (now Meta) and Google each introduced measures which prohibited, or substantially restricted, advertising related to cryptocurrency and, more broadly, the cryptocurrency industry,” the judgement read.

The restriction on advertising also affected other platforms which sourced their content from Facebook and Google, Mr Hamilton said.

Mr Hamilton claimed his company, Green Greedom Limited, suffered losses due to lack of profitability in cryptocurrency mining as a result of the ban.

As well, he said his investment in steem — another type of cryptocurrency — “experienced severe decline following the introduction of the ad ban provisions”.

He claimed damages, including aggravated damages, asked for a public apology and requested a permanent injunction to stop the tech giants from allegedly conspiring to halt virtual money advertising.

Mr Hamilton, who says he is a “serial technology entrepreneur, a highly accomplished lawyer in the technology, corporate and litigation fields” according to his LinkedIn profile, previously told the court his cryptocurrency holdings were valued at under $10,000, but other funded class members had holdings “in the $US1 to $US10m range” according to the judgement.

The tech giants argued the case should be thrown out because of Mr Hamilton’s “pervasive conflicts of interest”.

Mr Hamilton agreed he was the “sole arbiter” of “sue facebook tokens”, which he sold at a price of his choosing or gave away in exchange for non-financial contribution to the class action.

In a public social media post, he said the total “claim value for persons who had signed up to the action exceeded $1bn”, and the value of the JPB Liberty’s 5 per cent funding commission could exceed $50m.

Justice Cheesman said it was clear Mr Hamilton “has a financial interest in the litigation that significantly exceeds his own claim for relief in the proceeding”.