Facebook Bans Cryptocurrency Adverts To Protect Users From Potential Scams

Facebook Bans Cryptocurrency Adverts To Protect Users From Potential Scams

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The mounting price and increasing interest of people in bitcoin and other cryptocurrencies are attracting malicious scammers to deceive people interested in investing in cryptocurrencies.

In brief:

Facebook has completely banned advertising of cryptocurrencies, claiming that they are “frequently associated with misleading or deceptive promotional practices”.

Social media giant Facebook has banned advertising of all cryptocurrencies under its new advertising policy pertaining to cryptocurrency, binary options, and initial coin offerings.

Facebooks' Rob Leathern, in a blog post, announced the social networking site's new policy, banning ads that "promote financial products and services that are frequently associated with misleading or deceptive promotional practices."

The mounting price and increasing interest of people in bitcoin and other cryptocurrencies are attracting malicious scammers to deceive people interested in investing in cryptocurrencies. With this new policy, Facebook is trying to protect its users, which as of Q2 2017 were 2.7 billion.

In a statement, the site stated that numerous advertisements were found on the networking site that was misleading and dangerous and it has identified a range of different, popular scams. "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. We will revisit this policy and how we enforce it as our signals improve." — Facebook

Cryptocurrencies such as Bitcoin, Litecoin and Ethereum, and initial coin offerings all have gained mainstream attention, which has led to a number of scams. As such, regulators worldwide have begun to examine the cryptocurrency space. Facebook has taken into account the fact that there is no clear regulation for upcoming ICOs.

Blockchain veterans have raised concern about growing crypto scams and even Ethereum and Ripple founders have warned investors about potential scams flowing into the cryptocurrency industry. Likewise, Wences Casares, head of bitcoin wallet startup Xapo, suggested investors not to put more into ICOs than they can afford to lose.

Facebook has specifically banned adverts that urge people to redirect their retirement savings into token sales and those promising the absence of risk. Like in the case of Bitconnect, which was claimed to be an investment scam as it was guaranteeing fixed returns.

ICOs have been banned in South Korea and China, and regulators in other countries are issuing a warning against cryptocurrencies. Facebook's ICO and cryptocurrency ad ban comes at the time when SEC chief Jay Clayton and CFTC chief Christopher Giancarlo have raised similar concerns. Moreover, the US Securities and Exchange Commission (SEC) has charged the decentralized AriseBank with fraud.

The site added its advertising policies on Tuesday, in an update to its list of "prohibited content". However, it's unclear if Twitter or other social media sites will follow similar ad guidelines.

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