Facebook Bans Cryptocurrency Ads
Bitcoin’s price dropped on Tuesday night after the social media giant, Facebook, banned adverts promoting cryptocurrencies and after the United States authorities set in motion a probe into large online exchange.
People have been associating most of the cryptocurrency ads on Facebook with deceptive or misleading promotional practices. Facebook’s new policy prohibits adverts relating to initial coin offerings (ICOs) and cryptocurrencies from their over 2 billion-user network. This policy will undoubtedly benefit naive consumers who are prone to financial scams due to the newness of the cryptocurrency industry and the desire to make good investments.
Why would Facebook ban Cryptocurrency ads?
Advertisements for cryptocurrency-related investments have been increasing in most recent months. Bitcoin prices have also skyrocketed but most individuals fear that they are frauds. What’s more, the Commodity Futures Trading Commission (CFTC) had summoned Bitfinex, one of the popular Bitcoin websites in the United States, with a subpoena for selling and buying Bitcoin.
On Tuesday night, after Facebook’s announcement, Bitcoin’s prices dropped over 10% to trade at $9,810. That is the lowest price within the last two months and almost half of the peak price witnessed in December 2017. Even though people witnessed an extraordinary boom of Bitcoin in the year 2017, the continued regulation threat has highly affected its demand.
Facebook stated that deceptive or misleading ads have no place on their platform. Their new policy prohibits any advert that promotes financial services and products associated with deceptive or misleading promotional practices like binary options, cryptocurrency and initial coin offerings (ICOs). According to them, many companies have been advertising cryptocurrencies and ICOs that do not operate in good faith.
Mark Zuckerberg’s cryptocurrency plan
Earlier, Facebook’s chief executive Mark Zuckerberg had espoused the probable benefits of cryptocurrencies and that is why the ban has come as a surprise. At the beginning of year 2018, Zuckerberg said that some trends such as cryptocurrencies transfer power from the centralized systems into people’s hands and he was studying how they would adopt their use on Facebook.
On Tuesday night, Bloomberg described that the Commodity Futures Trading and Commission had subpoenaed Tether and Bitfinex in December 2017. The former claims that they have backed up their cryptocurrency – used as substitute on the Bitcoin buying websites – with real dollars in reserves. However, skeptics claim that they have not provided evidence to back that up.
Bitcoin and the other cryptocurrencies have faced scrutiny amidst fears that people are investing in the coins without adequate knowledge on the associated risks. Scammers and criminals have also been exploiting the boom.
The future of cryptocurrencies after the ban
Facebook has been working to clean up advertising on all its platforms including Instagram. The addition to their advertising policies has read as a biting indictment of the half-crazed cryptocurrency market. Most recently, the cryptocurrency market has been fuelled by speculations and has attracted numerous frauds.
Among the ads that Facebook has banned include those that prompt the platform’s users to click on links with promise of educating them. Most crypto craze detractors on the social media have welcomed the move. Others who have welcomed it are the supports of crypto coins who want to see the digital money portrayed in a legitimate fashion.
However, some other people believe that the move was a war to ban crypto. Others claim that Facebook is planning to launch its digital coins that people will use on the platform.
Among the places where people can learn about crypto coins, Facebook is probably the worst. The users are less sophisticated than those who use other social networks and are easier prey for charlatans, scammers and even snake oil salespersons. Some characters including the imposingly coiffured James Altucher might have influenced the ban – their get-rich-quick-schemes have been promoting Bitcoin’s seedier side.
Facebook’s Product Management Director Rob Leathern Wrote on the sites blog that they want people to continue discovering and learning about new services and products through Facebook adverts without the fear of deception or scams.
The suspension of cryptocurrency and initial coin offering adverts might only benefit the cryptocurrency community. Some scams such as Arisebank and Bitconnect flourished through popular platforms like Facebook.
Actually, if you are a Facebook user, you might have realised that their advertising policy is fussy. The list of supplements and health foods on the site is extensive. We can also add cryptocurrency and ICOs projects to that list. With the ban, the genuine cryptocoins will stand.