Facebook recently detailed a change to its advertising policy that carries major implications for Initial Coin Offerings and some cryptocurrencies. Listed under “Prohibited Financial Products and Services,” the ordinance highlights ICOs and cryptocurrencies as potentially deceptive. While news sources are already running wild with this update, it is not actually as bad as it sounds.
Cryptocurrency Advertisements Are NOT Blanket-banned!
Here are the exact words of Rob Leathern, Facebook’s Product Management Director (bold added for emphasis):
Ads must not promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings, or cryptocurrency.
He detailed four examples to clarify the remark:
Evaluating these as one, you can clearly see what all of those examples have in common. All of them target and entice inexperienced investors. Any prudent investor would avoid those advertisements simply based off the headline. Facebook is not lumping all cryptocurrencies into the category of “misleading or deceptive” (although some crypto-centric advertising absolutely is), nor is it banning all related advertising.
This is not a blanket ban, but rather an effort to clean up the wily advertising that unfortunately pervades the crypto-space. You’ll find that attempting to run an ad for a legitimate venture that happens to be tied to crypto will still be met with success. Facebook wants your advertising funds. It just asks that you don’t put the entire community to shame when you do advertise.
What can we expect moving forward?
Leathern continued his new policy as follows:
We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception. That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.
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.
A few things stick out here. First and foremost, this suggests that it would like to continue allowing ads that operate in good faith. Sources that are not deliberately misleading, manipulating, or taking advantage of viewers for personal gain pose no harm and should not expect to be shunned. Also, this will be a gradual process. Don’t expect every ad you see to be fully trustworthy. Its system is not flawless (yet), but FB is very good at perfecting ways to police its users, and we can expect prompt action. Until then, be vigilant.
Is this a good or bad step for Facebook and crypto?
Admit it. You are sick of seeing clickbaity ads on Facebook. Realistically they are doing the community a favor by policing the space a little more carefully. No one likes new rules and regulations, but sometimes they are a necessary evil. Of course the potential does exist for these new measures to be taken to the extreme, and in that case the effect would be negative.
Additionally, this simply ads to an increasingly regulated environment for crypto, and it is beginning to feel cumbersome. At this point stifling ICOs has become a trend. First China, the Korea, a few smaller countries, and now Facebook. Expect more of the same moving forward. Let’s just hope the world’s most popular social platform with over 1.8 billion users can figure out a fair compromise on this one.