Facebook Bans All Cryptocurrency Advertising Over ‘Get Rich Quick’ Scams
Posted on: February 1, 2018, 02:00h.
Last updated on: February 1, 2018, 02:15h.
Facebook has banned all advertising related to cryptocurrencies and ICOs over concerns that its users are falling victim to scammers.
The publicity surrounding the meteoric rise (and recent decline) of bitcoin had left users’ pages bombarded with ads from cryptocurrency “experts” selling books or newsletter subscriptions offering investment advice, or publicizing the very latest ICO. Many of these ads were genuine, of course, but many more weren’t, especially the ones that suggested their schemes involved “no risk.”
Facebook cited examples of banned advertisements with titles like, “Use your retirement funds to buy Bitcoin!” and, “Click here to learn more about our no-risk cryptocurrency that enables instant payments to anyone in the world.”
“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception,” said Facebook product management director Rob Leathern in an official statement.
That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”
Gambling on ICOs
The news comes as several gambling companies are planning ICOs in the coming months. An ICO allows a company to raise capital by introducing a new currency to the market, offering percentages of the currency to early backers through the sale of tokens.
Last week, Isle of Man-based CashBet announced a promotional partnership with British soccer club Arsenal, as it plans to raise between $40 million and $70 million from the initial sale of its CashBet Coins tokens
A recent report by Credit Suisse found that, in Q3 of 2017, ICO funding in the tech sector had “almost surpassed traditional angel and seed funding.” Gambling companies, which of course were early adopters of cryptocurrency, were among the biggest employers of ICOs, said the bank. It added that the trend showed no sign of slowing and warned that it could lead to overcapitalization.
Not that the average Facebook user spends much time thinking about overcapitalization when they’re idly clicking through to crypto “get rich quick” schemes, which is another problem. Even where ads are genuine, the new mania for cryptocurrency investment has led to concerns that people are being hyped into buying something they don’t fully understand.
Bitcoin Takes Hit Over Facebook Cryptocurrency Ban
Last week, Bank of Canada chief Stephen Poloz spelled it out. While he believed bitcoin was “a true piece of genius [that] will be applied to many, many areas of the economy,” he told CNBC that “buyers should be aware it is much closer to gambling than investing.”
Bitcoin took a hit in January, largely on the news that People’s Bank of China was moving to clamp down on its bitcoin miners and that South Korean authorities were preparing legislation to ban cryptocurrency trading. But Facebook’s announcement hasn’t helped either.
Despite the Facebook cryptocurrency ban, though, the platform is not anti-bitcoin. Founder Mark Zuckerberg said this month that cryptocurrencies will have an important role to play in the future of his company, he just needs to figure out what that is.
“There are important counter-trends … like encryption and cryptocurrency that take power from centralized systems and put it back into people’s hands,” he wrote in a post on Facebook. “But they come with the risk of being harder to control. 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.”
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