There is no denying that social media is a great tool for cryptocurrencies and ICOs alike to showcase what they can offer. Just to give you an idea, Facebook has around 2 billion users today.
However, things went downhill since Facebook led the cryptocurrency ad ban earlier this year. During that time, Facebook product management director Rob Leathern mentioned that “We’ve created a new product policy that prohibits ads that promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings and cryptocurrency”.
This was a game-changing decision since many are relying on Facebook in order to reach their market. It was right after a great fourth-quarter run by cryptocurrencies in 2017 when Facebook made the announcement.
Not long after Facebook announced the ban, Twitter, Alphabet, and Snap also followed. And also, you have Weibo and Tencent banning crypto ads as well.
Why Considered The Ban In The First Place?
The reason for the ban is due to the fact that the social media giant is trying to protect its users. According to a report by Satis Group, 81% of ICOs that have a market cap of more than $50 million is a scam. In addition to this, less than 4% of ICOs became successful. And recently, Securities and Exchange Commission even considered most ICOs as securities. The SEC also cautioned investors to exercise caution when investing in cryptos.
And it isn’t just the ICOs why Facebook banned crypto-related ads. You also have the fact that there are over $1.1 billion-worth of crytpos stolen by hackers in the first months of 2018 according to a study released by Carbon Black.
And of course, you also have the fact that the industry lacked overall regulatory clarity at that point. There wasn’t a universal rule followed by different countries when it comes to cryptocurrencies.
Changing Its Tune?
But is Facebook already changing its stance when it comes to cryptocurrencies? On June 26, Facebook revised the digital currency advertising ban. However, don’t get your hopes up just yet. You have the fact that there are a few exceptions. For companies that want to post on the platform, they will need to submit an application that will determine the eligibility of the company whether or not they will be allowed by Facebook or not.
Facebook still has the same hard stance against ICOs. Considering the fact that 1 out of 5 ICOs could potentially be a scam, Facebook is looking to play safe regarding this. It is quite interesting that Facebook’s decision comes after just two weeks since William Hinman, the director of the Corporate Finance at the SEC announced that it doesn’t view Bitcoin and Ethereum as securities, but rather as commodities.
Is this a sign of things to come in the world of social media? Does it mean that Twitter could potentially soften its stance on cryptos as well? And now that cryptos are trading low, and Bitcoin is also below $6K range, could this somewhat help cryptos regain their position?