News that Facebook, Google/YouTube, and Twitter have all announced bans on cryptocurrency-related advertising hit cryptocurrency markets already suffering a decline due to bad news on the regulatory front. The bans on all advertising of ICOs, wallets, exchanges, and trading advice are an implicit admission that the three biggest online advertising giants cannot identify legitimate cryptocurrency projects at scale. The changes come amid media and government backlash against a plethora of dubious ICOs being launched and promoted in a new, unregulated industry fraught with fraud.
There were 900+ ICOs in 2017 that raised billions of dollars for their promoters, a phenomenon that has been met with both intense excitement and harsh skepticism. Almost half of 2017's ICOs have already failed. This has caught the attention of the Securities and Exchange Commission (SEC), which now believes that many or most ICOs are probably securities offerings that are required to register with the SEC and comply with its regulations.
The crypto industry is still new for the biggest advertisement platforms. There has been a sharp increase in misleading or deceptive advertising on Facebook and Google using the name of Bitcoin and other cryptocurrencies. Facebook and Google have found themselves playing a losing game of whack-a-mole trying to rein in the bad players. Especially egregious are the thinly veiled Ponzi schemes and pump-and-dump ICO projects whose advertising has sometimes slipped through Facebook's and Google's algorithmic and human review filters. Things may be even worse for Twitter because of its real-time nature and the fact that people can operate anonymously.
In various statements released about the bans, the three companies made it clear that, while cryptocurrency may prove to become a legitimate asset of value and trade in the future, currently they see evidence that the market has harmed or may harm many people instead. What was left unsaid in the statements from Facebook, Google, and Twitter was anything about exposure to legal and financial liabilities that the companies could expect to incur if they are found to be complicit in promoting incompetently managed or fraudulent security offers.
Scott Spencer, director of sustainable ads at Google, said in a statement: “We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.”
By: BGN Editorial Staff