The cryptocurrency industry has been growing during the past few years, and several activities around them have exploded in popularity.
Initial Coin Offerings (ICOs), cryptocurrency mining, and blockchain services have been the most benefited sectors of the crypto market. Part of this viral growth was helped by the popularity of crypto related information and awareness spreading on social media networks such as Twitter, Facebook, Reddit and Google.
In the last month though, we have heard that these social networks have decided to ban cryptocurrency related ads. Why did that happen? Which are the reasons behind the ban? What do these networks expect from crypto-related advertising? This is what we will discuss in this article.
Google Bans Cryptocurrency Ads
Google, the gigantic company has decided to crack down on cryptocurrency-related ads. The information was released by Google on March 2018 in a statement uploaded by the company on its website.
The restriction will not only affect cryptocurrencies and related content, but also contracts for difference, rolling spot forex, financial spreading betting, and binary options and related products. The measure will be effective since June 2018.
Scott Spencer, Google’s director of sustainable ads, explained that companies that are carrying out ICOs, promoting wallets, and giving trading advice will not be able to keep advertising with Google.
Mr Scott explained:
“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm potential for consumer harm that it’s an area that we want to approach with extreme caution.”
Apparently, google took down over 3.2 billion ads that did not comply with its policies. That’s an important number. Compared with 2016, it is almost two times higher.
But Google’s ban does not end there. According to a blog post released by James Wagner, Extensions Platform Product Manager, in order to protect users from cryptojacking attacks the platform has decided to ban cryptocurrency mining extensions from the Chrome Web Store.
“As the extensions ecosystem continues to evolve, we remain focused on empowering developers to build innovative experiences while keeping our users as safe as possible,” reads the blog. “Over the past few months, there has been a rise in malicious extensions that appear to provide useful functionality on the surface, while embedding hidden cryptocurrency mining scripts that run in the background without the user’s consent.”
This kind of activity is known as cryptojacking. A hacker installs a malicious software in some websites that consumes an important amount of power from visitor’s CPUs. In this way, they are able to mine cryptocurrencies like Monero.
Facebook Bans Cryptocurrency Ads
Facebook has also decided to take similar measures to the ones implemented by Google. Indeed, Facebook was the first important social network to update its advertising policy. According to a blog post written by Rob Leathern, Product Management Director at Facebook, misleading or deceptive ads have no place on Facebook.
The statement released says:
“We’ve created a new policy that prohibits ads that promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings and cryptocurrency.”
During the last months of 2017, cryptocurrencies gained important attention from the media. Recognised news outlets created specific programs to talk about cryptocurrencies and discuss how the crypto markets were behaving. But, with this increased interest in the society for virtual currencies, an extremely high amount of scams appeared in the industry.
Among the different frauds we can mention: Initial Coin Offerings that owners where not real, ICO owners that disappeared with all the funds gathered, or ICO ideas that were just simple imitations of other projects. As many investors were affected by this situation, social networks started to take the necessary measures to stop spreading these scams.
“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception,” says Mr Leathern. “That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”
These are some of the ad examples that have been forbidden by Facebook:
- Start binary options trading now and receive a 10-risk free trades bonus!
- Click here to learn more about no-risk cryptocurrency that enables instant payments to anyone in the world.
- New ICO! Buy tokens at a 15% discount NOW!
- Use your retirement funds to buy Bitcoin!
Audience Network and Instagram will also be affected by the new advertising policy. Facebook says that the policy will be enforced as soon as they see improvements in advertising campaigns. As mentioned before, Facebook is trying to create a network free from scammers and other fraudulent campaigns.
Twitter Bans Cryptocurrency Ads
Twitter is not outside the discussion about cryptocurrency related scams. Facebook and Google were the first two companies to ban these kind of scams, and Twitter has decided to follow the trend. Indeed, it was an obvious step to take.
According to Reuters, the company will start banning cryptocurrency related ads, starting on March the 27th, 2018. The new policy will not allow ICOs, token sales, and other related ads to appear in the platform.
Other cryptocurrency companies will also be banned, including crypto-exchanges and other wallet services. The only companies that will be allowed to place ads in the social network will be public companies that are listed on major stock exchanges. In Japan, only cryptocurrency exchanges under the purview of the national financial regulator will be able to advertise in the platform.
Director Zennon Kapron, of financial consultancy Karponasia commneted:
“With the increasing number of ICOs coming to the market, it is an impossible task for anyone, much less platforms like Twitter or Facebook, to keep on top of which ICOs and cryptocurrencies are genuine versus frauds… Although certainly ICO advertising must have been a significant source of revenue for Twitter, the repercussions of fraudulent activities just weren’t worth the risk.”
The main intention behind the ban is to protect users from scams and fraudulent activities. Google and Facebook were the first two social network to implement these bans, and Twitter had no choice more than to follow them.
That does not mean that Twitter is against cryptocurrencies or other similar projects. Indeed, Jack Dorsey, CEO of Twitter, said that Bitcoin will become the world’s currency. Furthermore, he has donated an important amount of money to help in the development of the ultimate scaling solution for Bitcoin: Lightning Network (LN).
The most important social networks all over the world have decided to ban cryptocurrency related ads. Google, Facebook, and Twitter, almost at the same time, are fighting against scams and fraudulent cryptocurrency schemes. Other companies are starting to follow suit, MailChimp have also recently decided to ban cryptocurrency mailing list use on their platform.
There are limited options for ICOs, and new projects to start a campaign in social media networks without breaking the advertising terms so ICO teams will have to start looking elsewhere to generate interest in their companies. Initial Coin Offerings are expected to keep increasing in number and the amount of money that they will gather.
There are a growing number of ICO listing platforms which are more than happy to accept paid advertising and also offer free exposure via directory listings and social media promotion on their own accounts.
While initially this might seem to be a problem which can harm adoption, it may turn out to be a blessing in disguise. It’s no secret that large amounts of scam ICOs, phishing sites and other nefarious companies have been using paid advertising to spread their schemes. With this ban in place it can help curb that activity and help the genuine offerings rise to the top.
In time, when the industry is more mature and regulations and frameworks are put in place to prevent the worst scams we might see a return to advertising on this platforms – at the end of the day, they are businesses who rely on advertising income and the cryptocurrency and blockchain space is generating mountains of cash so they won’t want to ignore this for too long.