2017 saw the cryptocurrency market become truly larger than life. Investment levels and trading volume went through the roof, as the mainstream finally got to grips with Bitcoin and its huge potential. While most seem to be on board with the cryptocurrency movement, there are still some that see fit to fight against it. Taking an extremely controversial stance, we’ve now seen various tech brands and social media platforms ban advertising related to ICOs and cryptocurrencies.
Facebook was the first major brand to outlaw cryptocurrency advertising, citing that it was protecting its users against ICO scams and fraudulent token sales. Considering that Facebook has recently been rumbled for serious data breaches, it’s clear that the rules regarding “user protection” are pretty flimsy. That being said, it has set a precedent that other tech brands appear to be following, with Twitter also moving to ban crypto advertising.
These recent bans – along with official company stances on Bitcoin – have those in the cryptocurrency community baffled. This is because such bans are at odds with the thoughts and feelings of the heads of many major firms – especially in the case in Facebook, Twitter, and Snapchat. The bans have created a bizarre contradiction in many ways, as the tech brands banning crypto ads are the same companies talking up how they will change the world.
With there being a storm of confusion surrounding what companies are banning cryptocurrency advertising and why, we felt that it was time to clear up the situation. The following looks at the major brands wrapped up in the crypto ban controversy, along with what impact it might have on the crypto market in the future.
Facebook faces the music
Facebook is currently facing a firestorm of criticism. Hauled before congress over the Cambridge Analytical scandal, the backlash has been massive, with the hearing itself being a labeled an “utter sham” by some arms of the media. While not linked to the crypto ban directly, it’s certainly given people plenty to think about.
Just a few months ago, before the Cambridge Analytical scandal was uncovered, Zuckerberg was speaking positively about cryptocurrencies on Facebook. We reported on Zuckerberg’s Blockchain and cryptocurrency research here at BitStarz, as it was obviously an encouraging development. He discussed the benefits that cryptocurrency could have on not just Facebook, but the whole world. Centralization versus decentralization was another argument that caught the Facebook founder’s attention. Zuckerberg said, “There are important counter-trends to this, like encryption and cryptocurrency, that take power from centralized systems and put it back into people’s hands. 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.”
Facebook’s issues with ad-services – which have been linked to questionable activity for some time – appear to have caused a knee-jerk reaction. No less than two weeks after Zuckerberg’s positive comments, Facebook decided to pull all current crypto advertising, while banning any future campaigns. This move now looks extremely suspicious, especially in the wake of the Cambridge Analytica scandal that sent shockwaves around the world. With Facebook facing countless lawsuits related to Cambridge Analytica, this is a scandal that’s not going anywhere. Facebook has been able to distance itself from data-related controversy in the past, but no so this time around.
In a move that reeks of damage limitation, Zuckerberg has effectively put Facebook forward for regulation, an issue that – as we all know – currently hangs over the cryptocurrency market, “I’m actually not sure we shouldn’t be regulated. In general, technology is an increasingly important trend in the world and I actually think the question should be ‘what the right regulation is’ rather than ‘yes or no, should it be regulated’.” Zuckerberg is also backing future ad-transparency, “On the basic side, there are things like ads transparency regulation that I would love to see. If you look at how much regulation there is around advertising on TV and in print, it’s just not clear why there should be less on the internet, you should have the same level of transparency required.”
When you consider that Bitcoin and other altcoins are designed to give privacy and anonymity to users, the Facebook ban makes even less sense. From positivity to negativity, Facebook’s decision to ban cryptocurrency advertising comes across as a reactionary PR move more than it does anything else.
Twitter falls in line
If you were to listen to the words of Twitter CEO Jack Dorsey, Bitcoin is the digital currency of the future. Only a few weeks ago did we report that Dorsey saw Bitcoin eventually becoming the world’s single currency. “The world ultimately will have a single currency. The Internet will have a single currency. I personally believe that it will be Bitcoin, probably over ten years, but it could go faster,” Dorsey said. It’s also worth noting that Dorsey has personally invested in Bitcoin, which says plenty about his feelings on the cryptocurrency market. Plus, through his point-of-sale software startup Square, Bitcoin buy/sell functionality will soon be integrated. Add all of this to his financial and verbal backing of the Lightning Network and it becomes clear that Dorsey is standing behind Bitcoin all the way.
What’s disappointing is that Twitter – Dorsey’s own company – takes a very different stance on cryptocurrency. Falling in line behind Facebook, it’s implemented a full cryptocurrency advertising ban. Rumors of a potential ban began to circulate during early March, before it was finally confirmed on March 27th. Twitter began to blackout all ICO advertising initially, with many cryptocurrency wallet platforms also experiencing a similar fate. Aggressive and somewhat questionable, it’s clear that between Dorsey’s words and Twitter’s actions there is a huge disconnect.
Twitter – much like Facebook – says it’s taking such extreme measures to protect its users. But, what this is doing is effectively painting every ICO and cryptocurrency project with the same brush. The ban has probably had the opposite effect than intended too, as it has driven scam ICOs to be more aggressive in how they con people. A prime example of this new, aggressive approach happened just recently. A serial ICO brand – which we won’t name here – hacked John McAfee’s Twitter account and used it to promote various obscure tokens. The ban has also driven up the number of “fake accounts” impersonating famous cryptocurrency backers and advocators, with such catching out many unsuspecting users.
Google stands in its own way
Google as a company has a level of power that even bypasses the two social media giants we just mentioned. The search engine company spans the world as a tech powerhouse, which makes its decision to ban crypto ads all the more disappointing. Google’s updated financial services policy – from June onwards – bans cryptocurrency advertising through AdWords. Once again, it’s ironic considering that Google has allowed scams and questionable business operations to advertise via AdWords for years. Making matters even more bizarre, Google could actually stifle its own investments. Google has financially backed payment platform Veem and Blockchain-based cloud storage firm Storj, but both of these companies will almost certainly feel the effect of the crypto ad ban. When you look at the ins and outs of the ban, there is very little about it that adds up.
Google’s investment in Storj came about through parent company Alphabet. Tom Hulme (Alphabet Partner) praised the investment when he said, “The pace of innovation in the digital currency space is unmatched.” Google’s interest in the Blockchain and crypto sphere is clear, but now – along with promising ICOs and other cryptocurrency wallet providers – both Veem and Storj will be behind the eight ball when it comes to advertising.
The trend continues
It shouldn’t surprise anyone, but where the above companies go others have the tendency to follow. Snapchat is another social media powerhouse that has made the decision to ban crypto ads, but at this point the ban only stretches to ICOs. Once again, it’s the story of a company going against the actions of its investors, as Jeremy Liew (Snapchat Investor) remains extremely bullish on Bitcoin in interviews.
Other major companies are also being swept up in the crypto ad ban frenzy. Alibaba, Tencent, Baidu, and Yandex have all either implemented a ban or have announced plans to do so. As each week passes, it appears that more companies seem to be jumping on the controversial cryptocurrency ban bandwagon.
More questions than answers
The idea of a cryptocurrency advertising ban is as ridiculous in execution as it sounds on paper. Reasons behind the bans vary, but the one central argument is that major name companies aren’t willing to expose themselves to the crypto market while ICO regulatory guidelines remain up in the air. The problem remains that with the US Securities and Exchange Commission (SEC) looking to block cryptocurrency development at every turn, the dismissal of ICOs could persist for some time.
Misleading investment opportunities and ICO scams are still out there, as they are simply advertising through alternative means, so questions over the effectiveness of these bans still remain. The bans biggest impact has actually come through how it has harmed legitimate ICOs and the technology behind them. Innovative startups with unique, potentially market-changing business plans have been stifled due to scam operations and the ban that they’re supposed to prevent.
The reality is that crypto ad bans are – at this point anyway – lacking direction and proper implementation. Creating more issues than they’re actually fixing, these bans could have some pretty serious ramifications down the line if they aren’t correctly amended.