Facebook, Google and Now Twitter Bans Cryptocurrency Ads
Twitter has banned cryptocurrency advertisements. According to a statement from the social media giant, the move was taken to ensure the “safety of the Twitter Community.
This follows similar moves by Facebook and Google. The value of bitcoin dipped below $8000 in the wake of the announcement. The ban will affect initial coins offerings (ICOs) and token sales.
Cryptocurrency ads will now be locked out of major online sites. The Google ban takes effects from June.
“We know that this type of content is often associated with deception and fraud, both organic and paid, and are proactively implementing a number of signals to prevent these types of accounts from engaging with others in a deceptive manner.”
Listed cryptocurrency exchanges and secure wallet services will, however, be spared, the new policy states. Exchanges regulated by Japanese regulators will similarly be allowed.
Not All Gloomy
It’s not all gloomy for advertisers though.
The policy will be modified as the market evolves and as Twitter develops better tools to weed out deceptive advertisements, the company says.
Rumours about the impending ban started floating more than a week ago although Twitter did not confirm nor deny the reports.
Cryptocurrencies have been in the limelight for the past one year after massive gains in value. Several people continue to be attracted to the innovation and transformation the digital assets can bring but also by the prospect of striking it rich. The sector remains largely unregulated in many parts of the world and some critics have branded it the “wild west.”
Billions Raised in ICOs
Bootstrap companies have raised millions in what is constantly referred to as initial coin offerings. Users are given digital tokens in exchange for their money or other digital currencies like bitcoin to support certain blockchain projects. The tokens can be traded freely in exchanges. TokenData estimates that $5.6 billion was raised through ICOs in 2017 alone.
Cryptocurrencies are however marked by high volatility driven by wild speculation. Bitcoin has for example dropped from a high of nearly $20,000 at the end 2017 to below $8000 in a short three months.
A number of jurisdictions have been tightening their noose on the nascent industry. Some like China have banned cryptocurrencies altogether.
The US, South Korea and Japan have been increasing their scrutiny on cryptocurrency exchanges in the last one month. A senior SEC official recently said that digital assets may be treated as securities. This could have a profound implication on the tax obligations of investors.
France is Taking a Different Path
But others like France are taking a different direction. The finance minister last week announced plans for a legal framework that will be friendly to the sector. The move is meant to attract capital for startups seeking to raise funds through ICOs if they comply with certain rules. Those which do not comply will not, however, be barred from operating.
Calls for Regulation
Finance ministers and central bankers meeting at the recent G20 summit in Buenos Aires agreed on the need for regulations. Each country will form a taskforce and give proposals by July. The general sentiment was however positive for cryptocurrencies.
BOE governor Mark Carney recently called for regulation on the sector. A report prepared by the FSB, a body he chairs however said that the sector did not pose any threat to financial stability but raised concern over money laundering and other criminal activities.
Cryptocurrency transactions do not require a central point to authorise them and hence presents challenges for oversight. A community maintains the integrity of the system by verifying transactions. Once a record is made, the ledger is distributed to several computers across the world, making counterfeiting almost impossible.
Bitcoin has now shed 3% of its value in the last 24 hours. Ethereum has dropped more than 7% while Ripple has lost 4%. Bitcoin Cash has shed more than 3% and Litecoin has dipped 8%.
Verge is, however, swimming against the current gaining more than 26% in the last 24 hours.