Facebook announced last week that it was modifying its policies related to ads on blockchain and cryptocurrency, and banning ads for ‘contracts for difference’ (CFDs). The company said while it would still require people to apply to run ads promoting cryptocurrency, but they would no longer require pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency. However, ads promoting binary options and initial coin offerings (ICOs) would remain banned, and those promoting cryptocurrency, cryptocurrency exchanges, and mining software and hardware, would still have to undergo a review. Facebook had banned all crypto ads on the platform in January 2018, around the time of the bitcoin price surge, to prevent promotion of financial products “frequently associated with misleading or deceptive promotional practices.” In June 2018, it partially reversed this ban by allowing some advertisers to promote crypto businesses and services provided they were pre-approved by Facebook. The latest change drops this requirement for certain types of ads. Facebook also said it would ban ads promoting contracts for difference (CFDs) from June 5. According to the company, CFDs are often associated with predatory behaviour and used to mislead people.
The company added that the content, targeting and positioning of such ads on the landing page must comply with this update to its policy. “For example, an ad that directs to a landing page that features a restricted product, such as a cryptocurrency exchange, will still require prior approval. Or, if the landing page includes a prohibited product, such as an initial coin offering (ICO), we will reject it,” Facebook wrote.
Google, Twitter and Bing also have bans on crypto ads
In March 2018, two months after Facebook banned cryptocurrency ads, Google said it would also do so from June. The company said the move was part of an update to its policy, which would also ban other risky financial products – binary options, cryptocurrency, foreign exchange markets and CFDs. But in September, CNBC reported that Google would end its sweeping ban in October and allow regulated crypto exchanges to buy ads in the US and Japan.
Twitter also banned ads for initial coin offerings last March. “Under this new policy, the advertisement of initial coin offerings (ICOs) and token sales will be prohibited globally,” the company said. “We know that this type of content is often associated with deception and fraud, both organic and paid, and are proactively implementing a number of signals to prevent these types of accounts from engaging with others in a deceptive manner.”
Last May, Bing announced that it would ban cryptocurrency-related advertisements on its network by July 2018. The company stated in an official post: “Because cryptocurrency and related products are not regulated, we have found them to present a possible elevated risk to our users with the potential for bad actors to participate in predatory behaviours, or otherwise scam consumers.” In March, Microsoft said in its ‘ad quality year in review’ report that Bing had blocked more than five million cryptocurrency-related ads in 2018.
Legislation to ban cryptocurrencies in the pipeline
It emerged last week that a draft legislation that would pass into law the existing ban on cryptocurrencies in India was in the works. Titled “The Banning of Cryptocurrencies and Regulation of Official Digital Currencies Bill, 2019”, the government plans to release the draft legislation at the end of May. The draft legislation currently under discussion is reported to formalise this ban through central legislation. The move has seen support from a number of government agencies, including the Department of Economic Affairs (DEA), the Central Board of Direct Taxes (CBDT), and Central Board of Indirect Taxes and Customs (CBIC). A committee of these agencies along with the Investor Education and Protection Fund Authority was of the view that there is “an urgent need to ban sale purchase and issuance of cryptocurrency”.
Cryptocurrencies are currently banned in India because of to an effective ban imposed by the RBI in April 2018. The notification prevented all entities regulated by the RBI from handling or enabling the use of cryptocurrencies in India. In February, the Supreme Court had given the government a “last opportunity” to formulate a cryptocurrency policy. It asked the government for a response within four weeks, failing which, it said, it would take a decision on the RBI’s ban. After a brief hearing in March, the court adjourned the matter once again to the second week of July.