File photo: A man walks past an electric board showing exchange rates of various cryptocurrencies including Bitcoin (top L) at a cryptocurrencies exchange in Seoul, South Korea December 13, 2017. (REUTERS/Kim Hong-Ji)
Facebook brought the hammer down on “misleading financial products” on Tuesday, January 30, by effectively banning any and all advertisements for cryptocurrency exchanges, initial coin offerings, and binary options trading from any Facebook platform. That includes Facebook proper, Instagram, Audience Network, and Messenger.
“Two of our core advertising principles outline our belief that ads should be safe, and that we build for people first. Misleading or deceptive ads have no place on Facebook,” Facebook said.
It might sound like a sweeping policy, and that’s because it is. Facebook claims the policy was designed to be broad, so it might be refined in the future. According to Facebook, the goal here is to protect consumers from potential scams, first and foremost. Accommodating potentially hazardous financial service companies isn’t a part of the equation.
“We’ve created a new 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,” Facebook’s release states. “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.”
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As interest in cryptocurrency skyrockets, it makes sense that Facebook would slam the door on ads that could prey on its users. Cryptocurrency is notoriously hard to regulate and its volatility makes it fertile ground for scammers and predators. Earlier in January, one of Japan’s largest cryptocurrency exchanges lost $400 million in NEM tokens to theft. It wasn’t part of a scam, granted, but it does illustrate the larger problem here: There’s a lot of money flying around in cryptocurrency exchanges and even the legitimate ones have a hard time securing their investors’ money.
“We also understand that we may not catch every ad that should be removed under this new policy, and encourage our community to report content that violates our Advertising Policies. People can report any ad on Facebook by clicking on the upper right-hand corner of the ad,” Facebook said.
Cryptocurrency advocates might see this move as unnecessarily draconian, but given the recent scrutiny Facebook has been under, a crackdown on cryptocurrency advertisements makes sense — addressing a problem before it gets out of hand.
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