Why Facebook is Revising its Ban on Cryptocurrency Ads
Facebook was the first major tech company to ban cryptocurrency ads in January just as the craze for virtual assets like bitcoin hit fever pitch.
The social media giant is now reconsidering the move. In a new policy update that took effect June 26, crypto ads will still be allowed, but only from pre-approved advertisers. Ads promoting binary options and initial coin offerings will remain banned.
“In the last few months, we’ve looked at the best way to refine this policy – to allow some ads while also working to ensure that they’re safe. So starting June 26, we’ll be updating our policy to allow ads that promote cryptocurrency and related content from pre-approved advertisers. But we’ll continue to prohibit ads that promote binary options and initial coin offerings,” a statement says.
It is not clear what prompted the reversal. What is clear is that the interest in cryptocurrencies remains high despite the downtrend occasioned largely by increased regulatory scrutiny. More likely, Facebook is keen not to lose the huge advertising revenue from the sector.
One other thing is that the regulatory environment has been improving since January. Countries like Japan and South Korea now have some of the clearest regulations.
The Securities and Exchange Commission has also been providing some of the clearest guidelines yet on cryptocurrencies. It recently declared that Bitcoin and Ether are not securities after finding that they were sufficiently decentralised.
Such pronouncements serve to push cryptocurrencies towards greater legitimacy and help usher in more institutional investors who have been sitting on the fence. This can only mean more advertising revenue.
Despite the ban, the company has been experimenting with blockchain, the technology that powers cryptocurrencies. A Coinbase staffer was even brought into the fold to spearhead the project which still remains an internal affair.
Facebook’s initial ban was initially premised on the need to “protect” users from numerous ICO and cryptocurrency scams taking advantage of the huge enthusiasm. Nevertheless, the company received a lot of backlash for the move. Several suits challenging the move were also filed.
Facebook’s ban was followed by similar ones by Twitter and Google. Twitter noted that “this type of content is often associated with deception and fraud, both organic and paid.” However, it said the policy will be modified as the market evolves.