With the rise in cryptocurrencies springing up, it’s hard to tell which of the companies isn’t acting in good faith. Even so, virtual currencies are now regarded as some kind of fortune or investment other than an actual form of currency which can be traded with, making the US government go tough on them. The Facebook boss has announced with regard to this, that it will block any advert promoting any kind of cryptocurrency product.
However, this is not to say that Mark is totally against cryptocurrencies for placing the ban on his platform. According to him, it’s a cautious act to prevent unsuspecting users from falling victim to crimes. Many technologies are emerging but some of them are obviously not “acting in good faith” especially when their primary source of revenue is trading in virtual currencies.
The tremendous increase in bitcoin’s value pushed its sisters like etherium and dash to also soar in value within a short period, paving the way for a countless number of virtual currencies to emerge. When a new currency emerges, they advertise binary options and ICOs (Initial Coin Offering) before they launch, hoping that as the coin grows more popular, so will the value. Many users who do not want to be left out in the crypto wave rush to accumulate coins with the hope of keeping them as a future investment.
However, many companies use this as a deceptive way to raise huge sums of money without the appropriate regulatory measures associated with sustaining the company via the traditional investment process. Hence, they fall, leaving their investors with nothing, since they never had a stake, whatsoever in the company.
“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception”, Product Management Director, Facebook Business said. The greatest worry is the huge traffic that Facebook ads pull when effectively targeted, luring so many unsuspecting victims into the ICO scam. In fact, SEC recently froze crypto assets of a Texas-based company that claimed to have raised over $600m through an ICO.
In all, we think that the new policy by Facebook is an attempt to shield the integrity of its advertising platform. With respect to this, phrases such as “Buy tokens at a 10% discount!” and other similar phrases are now prohibited in sponsored ad placements.