This is not the best of times for cryptocurrency as most of its advertisements are flagged by major social media channels such as Google, Twitter, Facebook, etc. While there is no regulation directly controlling the activities of cryptocurrency, this latest news shows the general attitude toward the industry by various industry leaders. It is true that there has been a rampant fraud being committed in the coin industry, which is the reason why several companies have moved to ban all forms of coin ads. As a result of that, these moves had a negative impact on the industry, but some experts laud the action, stating that it may have a positive long-term effect.
In this post, we shall look at the companies that have banned coin ads, and what potential effects this may have on the industry. Throughout 2017, cryptocurrencies had become an interesting topic. What had first begun as an enthusiast topic around forums and blogs blew up into mainstream media. One significant trend was in ICOs, which had surpassed the amount of funding generated through venture capital. Popular news websites and television networks would often talk about crypto coins, and this led to the intervention of financial regulators. In December of last year, the SEC warned people to be wary of crypto coins saying there was a proliferation of ‘fraud and deception.’ Soon after that, social media websites made their move.
The first company to ban coin ads was Facebook. On the 30th of January, the company announced a blog post that it would entirely ban all crypto coin related ads on their services. Since Facebook is a major tech company, the actions set a precedent for other companies to follow, which is precisely what happened. Google, in its official statement released on the 14th of March, followed Facebook. They stated that from June this year, there would be no crypto coin related adverts allowed on their services. But then, it turns out that Google had been quietly limiting the reach of coin ads even before the announcement. Google makes use of AdWords to create advertisements for their clients, and some advertisers had noticed a marked drop in views for their ads. A few days later, Google made the official statement, and their Financial Services policy was updated. This action by Google will have a huge impact since Google adverts can be found on most websites, blogs, and forums. Moreover, there are billions of searched done on Google every day, and that would radically reduce the reach of coin advertisers. The ban on coin ads by Google includes not only the coins themselves but also ICO cryptocurrency exchanges, coin wallets, and even coin advice. Consequently, this affects lots of individuals involved in the industry. Besides these two giants, Snapchat and LinkedIn are also blocking all adverts related to cryptocurrency.
In fact, Snapchat started removing adverts for ICOs back in February that they believed were often misleading. Although LinkedIn does not allow the ads, though, Microsoft, its parent company, still allows them to it other platforms like Bing. Although it can be said that these do not have much of an impact; at least not when compared to, say, Google. Yahoo also said they were reviewing their policies in the matter, and we can expect that the ban is also coming soon from them. The latest entry into the matter is Twitter, who announced their ban on the 26th of March this year. The story is also similar to the world with more companies doing the same. Perhaps you could even say Chinese got the ball rolling since it banned all ICOs and coin trading in August last year. Since then, ads for this product have also been disappearing from Chinese social media sites like Baidu, Weibo, and Tencent. Surprisingly, Japan is also doing some of the same. This is surprising considering that it is the only country in the world to legalize Bitcoin. This followed a hack on a Japanese exchange that made away with $530 million worth of coins. The most popular social media site in Japan, Line, already does not allow coin ads to protect its users from potentially risky coins. Meanwhile, the country’s Financial Services Authority is rumored to be making moves as well. There has been no official statement, but sources close to the FSA have hinted that the regulator would want to ban all ads on ICOs and that advertisers not mention any specific coins in their ads.
What impact have these bans had on coins?
When Facebook announced their decision on 30th of January, the value of Bitcoin fell from over $11,000 to under $10,000 on the same day. Other coins too fell in value as investors panicked and sold their coins. Nevertheless, there wasn’t as much of an impact if other companies issued their bans, perhaps because the industry expected it to happen. Presently, it seems like all these bans have not had as huge an impact as one would have expected at first, and it’s not too surprising. Last year, after the PBoC banned ICOs, coin trading and their ads, it did not stop the industry from growing. Even today, demand for coin in China is still as high as it ever was, except for the brief panic at the time. Now there is the same phenomenon happening with the latest bans on coin ads. However, crypto coins have still not been able to make it out of their slump, and instead, they are continuing to decline in value. This decline has had nothing to do with the banning of coin ads, which shows that the actions have not had as much of an impact as you would have expected. However, there is a psychological impact that cannot be denied, and that is regarding the perception of coin among the masses. When people see big companies like Google and Facebook outrightly banning ads on the coin, it gives the impression that the whole industry is a fraud. Such a perception may discourage both investors and authorities from investing in the industry. Not to forget that these bans have also been conducted on ads about binary options, an industry that most financial regulators are either banning or considering banning. Being lumped together could cast a negative sentiment toward coin too.
How will the cryptocurrency industry perform in the future?
It is going to be extremely difficult for newcomers to establish themselves now that these avenues of advertisement are shut down, but the industry as a whole will not suffer. Any entrepreneur, who would like to raise capital through an ICO, would have a hard time finding potential investors. The same would go for companies who are launching a potentially revolutionary coin. Fortunately, the ban does not cover blockchain-related ads; these are still allowed. Therefore, advertisers will always find ways in which to market their products without actually mentioning ICO or crypto coin. Besides, the move to ban coin ads is only temporary. In the same blog post by Facebook, the company stated that they just placed the ban temporarily as they try to come up with a better method of detecting fraudulent companies from the legitimate ones. This statement shows that Facebook does not plan to ban coin ads for good, but rather to place it on hold as they figure things out. They might be waiting for some other financial regulator to pass specific laws regarding crypto coin. That would provide Facebook with a blueprint on how they should structure their policies. Since the other companies followed Facebook’s lead, it is not far-fetched to believe that they too have the same vision as Facebook. Remember that these companies rely heavily on revenues from product advertisement, and they would not want to lose that revenue stream. These companies mostly would create a means to analyze all crypto coin ads before they went live to ensure that they were legit. All the same, the entire industry could not collapse or even be cracked just because of a ban on coin ads.
