Crypto Ad Bans: Internet Giants Take Action - So what?

Crypto Ad Bans

Following Facebook’s announcement in January that it would ban all adverts for cryptocurrencies and ICOs and Google’s decision to impose similar restrictions in March, Twitter has reacted by claiming last Monday that it would do the same.

A Twitter spokesperson declared that “under this new policy, the advertisement of Initial Coin Offerings (ICOs) and token sales will be prohibited globally.” The company’s main goal is to ensure the safety of its community by protecting consumers from online scams.

What is the actual purpose of implementing these regulations?

Firstly, it proves once again that big tech companies are increasingly influential – maybe too much – as to how financial services products are advertised as regulators themselves have not been able to agree on a decisive solution on the matter. Indeed, just a few weeks ago, the G20 failed to agree on specific regulatory actions.

It therefore seems that the companies have unilaterally decided to take the matter in their own hands. However, it is interesting to see that these announcements are happening at a time in which they are increasingly under pressure because of their “losecontrol of data privacy” (Arnaud Masset, cryptocurrency analyst at Swissquote Bank) Moreover, is it a coincidence that Zuckerberg also recently announced that Facebook was looking into cryptocurrency? The main motivations behind the policies are therefore debatable.

What are the consequences?

These ad bans have not had significant consequences on the prices of cryptocurrencies. For instance, after the companies’ announcements, the price of Bitcoin dropped but recovered pretty quickly – in only a few hours after the Facebook news.

According to Austin Kimm, industry expert and IR Director and Co-founder of one of the leading digital crypto-banks, these ad bans might have a positive effect as they will “allow the most substantiated cryptocurrencies to rise to the top rather than be buried under hundreds of others throwing money in advertising.”                                                     

It is not likely that these regulations will have a long-term impact on the prices of cryptocurrencies, but they should nonetheless be taken into consideration. One of the downsides of the regulation would be if Google and other tech companies failed to acknowledge the difference between an ICO selling token and the utility nature of a token. If this were to happen, the companies could end up banning all token ads, although those are often used in video games. The gaming industry using tokens would therefore be extremely hurt.

So what are the companies trying to do?

Companies are either trying to restrain the bad actors and promote the good ones or they are trying to protect their own interests and relieve the pressure put on them by regulators. One thing that we know for sure is that these internet giants are not against the idea of cryptocurrencies as Twitter’s CEO believes that eventually the bitcoin will become the internet’s single global currency within 10 years and Facebook is thinking about launching its own cryptocurrency! 

Sarah Uzzan