Facebook Bans Cryptocurrency and ICO Ads in Bid to Stave Off Scams
Social media giant Facebook has officially decided to ban advertising for all ICOs and cryptocurrencies, including Bitcoin, in a bid to clamp down on “misleading or deceptive promotional practices” on its network.
The Menlo Park, CA company announced the blanket ban through a blog post on Tuesday, January 30th, after deciding that too many cryptocurrency related advertisements were being used to promote dubious projects. Facebook's blog post particularly singled out a type of financial betting called binary options trading, which is a popular but risky way to make bets on cryptocurrency.
With over 1.15 billion monthly active users, Facebook is one of the most powerful platforms for targeted advertising, especially for aspiring startups looking to attract new users. ICOs have proven to be an effective way for many startups to raise money, with initial coin offerings raising the equivalent of $3.7 billion in 2017.
However, ICOs have so far remained outside the purview of government legislation, presenting an excellent opportunity for scammers and fraudsters to pull money from the pockets of unsuspecting people looking to cash in on the cryptocurrency hype. In fact, Facebook's ban on crypto ads comes right on the heels of a decision by the US Securities and Exchange Commission to shut down the initial coin offering of Dallas-based startup AriseBank, which claims to have raised over $600 million.