In what appears to be another step by Facebook towards curbing the spread of fake or misleading information, the social giant’s Product Management Director, Rob Leathern, has announced that the platform will be banning all ads related to initial coin offerings (ICOs) and cryptocurrencies.
In an official announcement, the company emphasizes one of its core principles, which is to provide a safe experience for users and protect them from misleading or deceptive ads. The statement then goes on to explain that Facebook will now be prohibiting ads related to a wide range of financial products, including but not limited to binary options, ICOs and cryptocurrencies:
“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.”
Given how more than $4 billion was raised via ICOs during 2017 alone, and the fact that they remain largely unregulated despite their growing pervasiveness, ICOs are the perfect opportunity for scammers and fraudsters looking to take advantage of their growing popularity.
While the news was disappointing to many people and companies planning to launch their cryptocurrencies and ICOs, many people and regulators have welcomed it.
John Lewis, CMO of tokentarget, an agency that supports ICOs with their marketing, welcomes the move by Facebook. He says: “we’ve had years of experience in navigating these challenging regulatory issues and a lot of experience in working with local and global regulators in our industry. This is the kind of shake-down the industry needs to ensure legitimate entrepreneurs in the cryptocurrencies and ICO space can get their projects off the ground as well as protecting investors”.
Moreover, since Facebook is, by a long margin, the most popular social media platform for advertising (with 2+ billion monthly active users), it is naturally the medium of choice for all types of ads, including ICOs and new cryptocurrency startups.
Pointing at bad actors in the financial space, Leathern wrote:
“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception. That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”
Interestingly, Facebook founder Mark Zuckerberg recently commented on cryptocurrencies, and spoke favorably about their potential to curb centralization and give the power back to the people.
“I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services,” he wrote in a Facebook post early January.
With Facebook now cracking down on cryptocurrency ads, legitimate projects may also bear the brunt of the prohibition and will have to explore other avenues for reaching out to potential users and investors.
TokenTarget’s Lewis says: “We hope that other large advertisers of these products and services follow suit to make our industry vibrant and safe for everyone. Over the years, we have helped companies like SportCo, Loci, trade.io, and Sirin Labs raise millions of dollars for their ICOs. A year later and this is a much more competitive landscape, so weeding out the bad boys is actually a good move from Facebook”.