Fearing Scams, Facebook Bans Cryptocurrency AdsDate Written: January 31 2018 Written By: George Miller
Just yesterday, Facebook announced a surprising change to its advertising policies. The company will no longer circulate ads from any cryptocurrency related companies, or ads that promote cryptocurrencies in any way. The “intentionally broad” ban includes all digital currencies, exchanges, and Initial Coin Offerings (“ICO”). The new policy ban even applies to legitimate crypto-related companies who are fully licensed and legitimate.
If a user breaches the new terms set forth by Facebook, their account will be blocked on Facebook.com and all of its associated platforms and services, including Instagram and other third party sites where Facebook sells ads. The crypto market reacted strongly to the news with red across the board. At press, Bitcoin was trading right around $10,000, down nearly 5% since yesterday.
Why Facebook Has a Problem with Cryptocurrency
Many people in the crypto community were caught by surprise when Facebook announced its new policy. Sure, some of the thousands of coins and ICO’s out there are scams – but do a few bad apples really spoil the bunch?
Facebook content, as it is now, is full of scams, hoaxes, and “fake news.” Hackers appear to have run innumerable phishing and scareware scams on the platform, and Russian troll farms were able to allegedly use Facebook to attempt to influence the 2016 presidential election. So why target cryptocurrency? And why go so far as to ban an entire industry?
According to Facebook, the new policy was created because it wants its users “to discover and learn about new products and services through Facebook ads without fear of scams or deception.” So, to protect us all from things that are “frequently associated with misleading or deceptive promotional practices.” But if you’re in the multi-billion dollar dietary supplement or male enhancement industry, don’t worry. This new policy only applies to financial services, not every other industry that people use to perpetrate scams and frauds.
Without a doubt, Facebook has a duty to protect its users from harmful advertising. And the company’s advertising policy isn’t all bad. Facebook also prohibits ads for the sale or use of drugs, guns, and counterfeit documents. It bans the circulation of spyware, malware, pornography, private information, and unreasonably shocking or offensive material. But who decides what is banned from the platform, and why?
Corporate Censorship or Consumer Protection?
Facebook’s digital advertising empire is one of the most powerful forces on the internet. Ads netted $17.4 billion for the company during the first six months of 2017 alone, and the massive marketing machine shows no signs of slowing. However, the company has been under pressure to beef up protections against fraudulent and deceptive advertising.
After the Russian trolling scandal broke, Facebook has taken a more active role in moderating content. But when does this moderation become censorship? Fake news is tough to weed out because free speech and free press are protected by the First Amendment. This means that the government can’t do much about it, and so Facebook has good reason to step in and moderate inaccurate or deceptive news stories. However, the FTC, SEC, FBI, and several other federal agencies that monitor cyber crimes are responsible for protecting consumers from online financial crimes. Unless Facebook believes federal regulators are doing a poor job, why take such a bold position on consumer financial protection?
Facebook blamed the “many companies” advertising cryptocurrency and the like “that are not currently operating in good faith.” However, due to the scale of Facebook’s massive user network, it can offer targeted advertising services for less than $1 per day. This price point makes marketing services accessible for every entrepreneur – and most scammers – in every industry across the world. This makes an industry-wide ban on cryptocurrency ads even more puzzling.
Ostensibly, Facebook supports digital currency. Mark Zuckerberg recently posted on his own Facebook page about research he was doing to introduce cryptocurrency to his company. Specifically, he thought it would “take power from centralized systems and put it back into people’s hands.” Maybe after looking into it he discovered that Facebook is running the type of centralized system blockchain technology was built to disrupt, and figured it was probably best to keep it under wraps.