Google, Facebook, Twitter – Social Media’s crypto ban
So they’ve pretty much all done it. The main social media platforms have outlawed advertisements – at least for Initial Coin Offerings (ICOs) but in some cases for anything to do with cryptocurrencies.
Facebook and Instagram first, then Google, then Twitter. One by one, ICO promoters are running out of places to advertise and build the case for their new products.
Which, at least at first sight, isn’t exactly an endorsement of our industry. It doesn’t fill you with confidence that we’re well-regarded by the world’s biggest companies.
But let’s be clear: these bans aren’t a comment on cryptos themselves – it’s a comment on practices that all of know are sometimes associated with cryptos.
Facebook’s statement suggests this will be an evolving situation:
“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. We will revisit this policy and how we enforce it as our signals improve.”
So we might assume that once they are able to ‘better detect deceptive and misleading advertising practices’ they’ll start loosening the outright ban and instead make it one that only selects against the bad eggs.
From June 2018 Google will also be banning ads for cryptocurrencies, ICOs, wallets and exchanges. According to The Guardian newspaper
“Google said it removed more than 3.2bn ads that violated its policies in 2017, blocking what it described as the “majority of bad ad experiences”, including malvertising and phishing scams.”
That’s a lot of bad stuff.
So how does this affect, for example, firms who now want to launch an ICO?
Well, in the first place it’s no exaggeration to say that the ban is very significant. Facebook and Google alone account for over half of the US online advertising market.
So community-building around an ICO has now become more difficult. Getting that buzz going around your ICO is harder. The days of running a Facebook ad that takes people to a sign-up page – and so into the firm’s community – are over for the time being. Firms now have to find other ways of building up activity around their offering.
Which means, second, that other already existing groups will start to matter a whole lot more. Reddit will be a beneficiary as firms find ways to provoke conversation around their offering – as will other platforms like Telegram and internet chat rooms.
And then there’s the million dollar question… could the ban be a good thing?
Now that the main platforms for promoting ICOs has banned the promotion – and will likely be closely scrutinising them should the ban be lifted – will that chase out the scammer and con-artists that blight our industry? Will these bans, perhaps, do what the regulators have yet to do?
Not being able to broadcast their wares so freely might mean firms issuing new tokens will have to let their projects do the talking for them. Which means their emphasis will have to be on the utility of the product they’re building – and the problems it solves – rather than on the way they fund it.
Initial reactions to the bans were mixed – they’re new territory for so many people. So there had been talk of the bans being anti-competitive with possible legal action to follow. None of this has come to light – not least because private firms can actually quite legally choose who they want to do business with. And they’ve been doing just that for years. Vitally, they’re banning a whole class of products – not just individual players within that industry so the charge of market manipulation won’t stick either.
On the flip-side, the view that the bans do what regulators have yet to do seems to be the one gaining traction. Even though the ban sends out the wrong signals to the wider public that short-term downside might be worth suffering if the long-term upside is that good firms can eventually advertise – and flourish – while back-street scammer struggle and fail.
Assuming the bans are gradually lifted we might find they’re also revealing a safer, more civilised blockchain/cryptocurrency world – one in which good, valuable products are being built and reliable, meaningful cryptocurrencies are being mined. And that can only be a good outcome…