Facebook reverses ban on cryptocurrency ads
- Facebook eased its blanket ban on cryptocurrency marketing from January with a new set of rules allowing preapproved advertisers to promote the digital dollars, according to a company blog post. The social network said the original ban was put in place to avoid "deceptive and misleading" marketing on its platform.
- Ads for initial coin offerings (ICO), a way of raising money for new cryptocurrency ventures, is still prohibited. Cryptocurrency advertisers will now need to fill out an online form for approval before running ads.
- Companies including Alphabet's Google, Twitter and Snap's Snapchat followed Facebook with their own bans on cryptocurrency ads, per The Wall Street Journal.
Facebook's policy change just months after the original ban shows the social media network's struggle to balance its growing reputation as a company unable to protect personal data with its culture of leading technological advancements. The move may change the nascent but booming industry, especially if Google and Apple, who both have cryptocurrency ads bans, follow suit.
As with every new market mania, fraudsters soon appeared, posting online ads that touted hot new ICOs and claims of receiving celebrity endorsements. The scams continued to grow, prompting the Securities and Exchange Commission to issue warnings that cryptocurrency deals may violate securities laws. The SEC also launched a website last month touting a fake coin offering called "HoweyCoin" as an example of what to avoid.
These deceptive ploys complicate how businesses like Facebook embrace new digital assets while public opinion about a platform dip with their growing distrust of promoted ads. While Facebook banned cryptocurrency ads before the Cambridge Analytica scandal earlier this year, the social media giant will now need to be extra careful in screening ads as it works to reemerge from the damage of its privacy fumble. The company this month cracked down on sellers of shoddy products on its Marketplace classifieds section, and its screening process for crypto sellers seeks to similarly weed out purveyors of fake coin offerings.
The cryptocurrency market has spawned an industry of social media influencers who get paid to promote ICOs by the entrepreneurs behind those offerings, The Los Angeles Times reported. Crypto celebrity John McAfee said in March that he charged $105,000 a tweet. The endorsements started to play a bigger role in ICO marketing after Google, Facebook and Twitter implemented cryptocurrency ad bans this year.
- Facebook Business Updates to Our Prohibited Financial Products and Services Policy
- The Wall Street Journal Google's and Facebook's Dubious Bitcoin Bans