In January 2018, Facebook announced that moving forward, it would ban all online advertisements that promoted cryptocurrencies. Those ads targeted included ones centering on binary options and Initial Coin Offerings (ICOs). The company itself declared that the move was intended to be broad, claiming that the ads in question were most commonly associated with deceitful promotional practices.
As expected, those legitimate advertisers who weren’t operating under any pretense, immediately challenged the controversial move. The ads weren’t just banned from the core Facebook (NASDAQ: FB) site; they were also subsequently removed from any platform on which Facebook sells ads, including Instagram and its Audience Network, which incorporates ads onto its third-party apps.
Yet, on June 26, Facebook backtracked on that ruling. In another statement, the company announced that it would now accept cryptocurrency-centric ads from pre-approved advertisers on a case-by-case basis. It will determine which advertisers are reputable and which are not via a complex vetting process. At the crux of this process is an online application form titled “Cryptocurrency Products and Services Onboarding Request” in which a company can sign up to be considered as a trusted source.
Advertisers will be required to share their Facebook AD Account ID, website domain and associated business information associated with their account. They’ll also be required to disclose whether or not they hold any required licenses or regulatory certifications, and if their company is traded on the public stock exchanges.
While the ban against cryptocurrency ads has been somewhat relaxed, the prior restrictions put into place against binary offerings and ICOs has not been altered. Still, the move is a promising step toward allowing cryptocurrency companies the freedom to ethically advertise their offerings to the largest social media audience available. The change comes as no surprise, given that during the initial statement, Facebook executives maintained that the policy would be a living one, and that they’d reassess its performance periodically to determine if any changes needed to be made.
Still, the change comes at a time when other major industry players, including Google (NASDAQ: GOOGL) and Twitter (NYSE: TWTR), still have strict no-crypto ad policies in place that don’t show any major signs of going away any time soon. Meanwhile, by utilizing underhanded tactics such as misspelling flagged terms, some cryptocurrency advertisers have managed to sneak under the radar on many of these platforms, Facebook included.
What It Means for Investors
Before the January Facebook bam, there were concerns that uninitiated and new investors would be swayed by the aesthetics and promises of those less-reputable advertisers and as such, would enter into a financial situation that was difficult to climb out of. This wasn’t an unfounded concern, as many cryptocurrency promoters would prey on those new to the market. As such, the ban helped quell those concerns and helped encourage any investor interested in cryptocurrency to seek the professional advice of a trusted financial advisor rather than simply click on a link because the idea sounded cool.
Moving forward, now that the ban has been relaxed and a new vetting procedure is in place, those looking to make a move into the cryptocurrency investment sector should practice discretion before clicking on any advertisement that promotes the industry. While some might be from legitimate sources, others from unethical sources might still fly under the radar. As with any investing move, think quick, look both ways before you leap, and only click on trusted ads you know to be valuable in your knowledge journey.
