Menlo Park, CA – On Tuesday, Facebook announced a new policy banning ads promoting cryptocurrency, as a means of preventing what the company called “financial products and services frequently associated with misleading or deceptive promotional practices.”
This means that advertisers – including companies that operate fully legal businesses – will be banned from the promotion of cryptocurrencies, including bitcoin, the most widely accepted crypto. Additionally, the promotion of initial coin offerings (ICOs) and binary options will be eliminated by Facebook, according to a blog post by the company.
Advertisements that violate the new policy will not only be banned from Facebook’s core app, but also from Instagram and the company’s ad network, Audience Network, which places ads on third-party applications.
In the official announcement by Facebook Product Management Director Rob Leathern, he wrote:
“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception. That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”
Leathern added, “This policy is intentionally broad while we work to better detect deceptive and misleading advertising practices, and enforcement will begin to ramp up across our platforms including Facebook, Audience Network and Instagram.”
The move comes on the heels of persistent claims of spam-like and fraudulent cryptocurrency ads on the platform. The decision has been largely welcomed by savvy crypto enthusiasts, who recognize that these types of spammy advertisement often do not promote the actual benefits of cryptocurrency, according to Kai Sedgwick, in a report from Bitcoin.com.
The report by Bitcoin.com went on to explain:
Of the myriad places on the web where a person can learn about cryptocurrencies, Facebook is possibly the worst. Its users tend to be less sophisticated than those who frequent other social networks, and are easy prey for scammers, charlatans, and snake oil salesmen.
The moratorium on crypto ads can only benefit the cryptocurrency community. Scams such as Bitconnect and Arisebank are allowed to ferment on platforms such as Facebook, out of the reach of sharp-tongued Twitter traders who would otherwise call them out. Examples of ads that Facebook cites as being in contravention of its new policy include “New ICO! Buy tokens at a 15% discount NOW!”
Just how effective the crypto ad ban will be remains to be seen, as last year, following a report by ProPublica, which revealed Facebook was allowing advertisers to discriminate based on race, the company announced a ban on discriminatory ads. When ProPublica conducted a follow up over a year later, it was still able to purchase discriminatory advertising that would allow advertisements to not be shown to blacks or Jews.
Interestingly, the move has prompted speculation as to whether Facebook is attempting to position itself to launch its own blockchain product, with the implication being that it is removing all conversation around the competition. Although there is no hard evidence to suggest that is the impetus behind the crypto ban, at the beginning of January, Facebook CEO Mark Zuckerberg publicly described cryptocurrency as something that can “take power from centralized systems and put it back into people’s hands.”
In a Facebook post, Zuckerberg wrote:
For example, one of the most interesting questions in technology right now is about centralization vs decentralization. A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people’s hands. (The first four words of Facebook’s mission have always been “give people the power”.) Back in the 1990s and 2000s, most people believed technology would be a decentralizing force.
But today, many people have lost faith in that promise. With the rise of a small number of big tech companies — and governments using technology to watch their citizens — many people now believe technology only centralizes power rather than decentralizes it.
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. 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.
These statements by Zuckerberg may be considered ironic, as the centralization of Facebook has led to the soft censoring of material that runs contrary to the corporate-government narrative. This soft-censorship is achieved by continual tweaks to the Facebook algorithm; the latest of which was rolled out last week under the auspices of limiting the reach of “untrustworthy news sources” while boosting local news outlets and posts from friends and family.
In real time, this equates to large swaths of independent media and citizen journalists being squeezed out of existence, as their reach, and subsequent ad revenue, is decimated as large corporate entities are relatively unscathed.
There will likely be pushback from tech investors and entrepreneurs that believe the wholesale ban punishes an entire sector of technological innovation and crypto-related services and products. In fact, two prominent tech investors — Peter Thiel and Marc Andreessen — sit on Facebook’s board, both of whose firms are strong supporters of the ongoing crypto revolution. Additionally, David Marcus, the head of Facebook Messenger, sits on the board of the mega-popular cryptocurrency exchange Coinbase.