What Does The Crypto Ad Ban Mean For The Future Of ICOs?
Twitter has become the latest tech giant to take aim at the Cryptocurrency industry with a ban on all ICO advertising.
Twitter Inc. has announced its decision to ban private advertising for cryptocurrency token sales and initial coin offerings on its platform. The San Francisco-base firm’s move follows similar clampdowns on the nascent industry by other leading tech companies and social media platforms.
In January the social network Facebook updated its advertising policy to block ads on its platform that promote the sale of cryptocurrencies, initial coin offerings and binary option citing growing concerns around the proliferation of misleading and deceptive promotional practices.
Mirroring this, Alphabet Inc—Google’s parent company—announced its own decision to enforce similar bans, although such an embargo would start in June 2018.
These moves consolidate similar prohibitions that had been instituted much earlier by Chinese web giants Alibaba, Baidu and Tencent and long since in the case of Reddit, implementing its ban in 2016.
Why the ban?
In a blog post, Facebook Product Management Director Rob Leathern outlined the justification for the prohibitory measures as stemming from the too frequent association with “misleading or deceptive promotional practices” the industry has undergone.
Twitter echoed these concerns in explaining the prohibitive measures, with a spokesperson pointing to the continued concerns regarding the heightened risk of exposure to fraudulent practices within the nascent industry. “We know that this type of content is often associated with deception and fraud, both organic and paid, and are proactively implementing a number of signals to prevent these types of accounts from engaging with others in a deceptive manner.”
With Bitcoin, Ethereum and a host of other coins hitting the mainstream, there has been a proliferation of out and out scams. Although regulators worldwide have yet to agree on a regulatory framework for the crypto market they have taken continued note of the possible risks that ICOs expose consumers to.
However, regulators have taken continued note of the possible risks that ICO’s expose consumers too. In the U.S. the Securities and Exchange Commission (SEC) has increased its efforts to police token sales through scores of subpoenas as reported earlier in March. Going further, the Chinese government has banned ICOs ought right.
What does this mean for the crypto industry?
For the Industry, at its simplest, these developments mean ICOs will struggle to match the same kind of market penetration they once enjoyed. Exchanges and marketplaces that are the usual channels for promotion of ICOs are effectively barred from gaining access to 70% of the global digital ad market.
As investors digested Twitter’s move and the broader social-media clampdown on digital tokens, Bitcoin swung between gains and losses around the $8,000 mark. Since mid-December where Bitcoin peaked at close to $20,000 it has lost more than half of its value as investors come to terms with the intensifying scrutiny. In March alone the digital token has dropped by around a quarter of its value.