This article considers the legal implications of Youtube’s notorious purge of crypto channels on Christmas Eve. What legal context induces Youtube and other social media giants to operate as they do? The article does not explore whether it is morally proper to terminate a contract without cause or explanation and to threaten people’s livelihoods; it is not. Nor are political implications, such as Youtube’s liberal bias, discussed. The legal factors context surrounding Google’s Youtube purge are important. Users should know what is happening and why.
On Christmas Eve, Bitcoin.com contributor Graham Smith warned, “At least six crypto Youtube channels have reported in recent hours that their content is being removed under the site’s ‘harmful and dangerous’ policy, with one popular channel claiming Youtube pointed to a ‘sale of regulated goods’.” The purged channels received no warning, no plausible explanation. Presumably, the “harmful and dangerous” policy so vaguely referenced by Youtube was an alleged violation of Section 17(b) of the Securities Act of 1933.
It shall be unlawful for any person … to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof [italics added].
The original purpose of Section 17(b) was to make it illegal for anyone to promote a stock without disclosing any consideration they may have received from an issuer, underwriter, or dealer in the stock.