Facebook Inc. (FB) will allow certain cryptocurrency adverts on its worldwide platform again after blocking them entirely in January at the height of the bitcoin mania.
According to a corporate blog post, the Silicon Valley tech behemoth will now allow select preapproved advertisers to promote crypto companies and services, such as exchanges, but will continue to restrict advertisements promoting binary options and initial coin offerings (ICOs). ICOs, a hybrid of crowdfunding and an initial public offering (IPO), have raised billions of dollars from investors who purchase tokens in exchange for a stake in a startup. (See also: Facebook’s Bad News: Good News for Blockchain?)
Facing pressure earlier this year, Facebook stopped crypto ads to prevent the promotion of “financial products and services frequently associated with misleading or deceptive promotional practices.” Alphabet Inc. (GOOGL), Twitter Inc. (TWTR), and Snap Inc. (SNAP) all joined the prohibition, hoping to protect themselves against manipulative methods by corporations looking to play on retail investors’ “fear of missing out” (FOMO). This mania drove the price of the world’s largest cryptocurrency to near $20,000 in mid-December. As of Wednesday afternoon, Bitcoin was selling at roughly $6,126 per coin.
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To be eligible for the new modifications, potential advertisers must provide Facebook with “licenses they have received, whether they are trading on a public stock market, and other relevant public information on their company.” The new initiative is intended to allow Facebook to generate ad revenue from the high-flying industryyet hedge against scams that have hurt the platform and its users in the past.
Facebook reaffirmed that “not everyone who wants to advertise will be allowed to do so,” and that it would “listen to criticism, look at how effectively this policy works, and continue to explore this technology so that, if necessary, we may change it over time.”
Facebook established its own internal blockchain team in May to experiment with the distributed ledger technology that underpins digital currencies such as bitcoin. (See also: Facebook Sued in the UK for Fake Bitcoin Ads.)
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is very dangerous and speculative, and this article is not a suggestion by Investopedia or the author to do so. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site. As of the date this article was written, the author owns cryptocurrency.
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