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Facebook partially reverses cryptocurrency ad ban

Facebook is partially reversing its ban on cryptocurrency advertisements and will now allow some preapproved advertisers to promote crypto businesses and services.

Facebook had banned all crypto ads on the platform back in January, around the time of the bitcoin price surge, to prevent promotion of “financial products and services frequently associated with misleading or deceptive promotional practices.”

Now, advertisers have to go through an application process to be able to promote crypto products, though ads promoting binary options and initial coin offerings (ICOs) are still banned. Interested advertisers are now required to show Facebook “licenses they have obtained, whether they are traded on a public stock exchange, and other relevant public backgrounds on their business” in order to receive permission to run crypto ads.

On the application to advertise crypto ads, Facebook mentions that it will allow for advertisements that come within the ambit of the following: cryptocurrency products and services, education on cryptocurrency, cryptocurrency industry news and other content related to cryptocurrency products and services.

The crypto bubble has declined considerably since late 2017 when the price of bitcoin was close to $20,000. (This morning, it’s just above $6,000 per coin.) That sudden rise in crypto created a rush by customers wanted to buy bitcoin. Soon enough, ads appeared by Facebook promoting bitcoin promising inflate cryptocurrency values within hours, Facebook followed through and banned all crypto ads. It stated that the ad ban “is intentionally broad while we work to better detect deceptive and misleading advertising” and that it will revisit the policy.

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Soon after Facebook, others like Google, Twitter and Snapchat followed suit and banned crypto ads.

Note that the company started its own internal blockchain team earlier this year to explore the technology that’s used as the foundation for all cryptocurrencies.

Crypto-criticism

As its grown more popular, cryptocurrency has not been welcome in India. Since it is an unregulated currency which is highly risky and prone to fluctuations, the authorities are not too happy about it.

  • On June 05, British businessman Raj Kundra—the husband of Bollywood actor Shilpa Shetty—was questioned by India’s enforcement directorate (ED). He was allegedly involved in a scam that saw Amit Bhardwaj, founder of bitcoin firm GainBitcoin, reportedly duping investors of around Rs2,000 crore ($300 million). Read more here.
  • In April, the RBI barred banks and financial institutions from dealing in cryptocurrencies stating that “in view of the associated risks…entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling virtual currencies.”
  • In February, the RBI also cautioned citizens, saying that any user, holder, investor, or trader dealing with cryptocurrencies would be doing so at their own risk. The Income Tax Department has been struggling to track bitcoin and other cryptocurrency investments as well, in spite of sending out about 5 lakh notices to HNI individuals. It is to be noted that even though Bitcoin and other cryptocurrencies are not regulated by the government, they are not illegal in India.
  • In December 2017, the Union Ministry of Finance issued a warning on Bitcoin trading and other virtual currencies which are not backed by a government fiat. It also said that the price of Bitcoin is a matter of speculation and likened the trading of virtual currencies to Ponzi schemes.
  • Scams in buying and selling of bitcoin and other cryptocurrencies have been reported in India, with atleast eight ponzi schemes and scams reported to the Delhi Police since October 2017.

Facebook is trying hard to fine-tune its advertiser policy to prevent misleading and fake ads. Recently, the platform (tried to) clamp down on ads from shopping sites that deliver low-quality products and misleading advertisements via a feedback feature for all ads. This feature is applicable to crypto ads as well and can be “reported” to Facebook. In August 2017, it banned ads from the pages that repeatedly share fake news.

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