By Steven Krohn · October 17, 2018
Recently, major social media platforms have instituted a crypto advertising ban. Facebook first banned ICOs and crypto coins from advertising in January. Google soon followed with a ban in March.
The resulting impact has been negative for cryptocurrency markets internationally. New projects have suffered specifically as they cannot market projects as effectively as they normally would due to a crypto advertising ban.
Cryptocurrency is completely an internet-based phenomenon. Social media sites and group forums are where you find the most enthusiastic supporters and investors thus the reason to advertise on them.
A crypto advertising ban is detrimental for the entire industry. We will examine how new and existing crypto and ICO projects can actually benefit from social media advertising bans.
One reason given for a crypto advertising ban is based on the unregulated nature of the crypto markets which is it’s very nature. Google and others justify the advertising ban on the large increase in scams and fraud in the cryptocurrency market.
A crypto advertising ban is inherently unfair. Why? Companies from other fraudulent industries advertise on social media platform at will.
A major problem with an ad ban is that all companies are punished in a blanket fashion. This includes countless developers that have credible projects who worked hard building them.
Companies that adhere to rules and regulations must now rely on alternative advertising methods for their projects.
In June, the SEC announced that many crypto and ICO projects were classified as Securities. Therefore, they are legally obligated to be registered with the Commission.
This announcement was welcomed in some quarters. They argued that greater transparency would improve trust in the market.
Others were more critical of the ruling and saw it as a move to compromise one of the foundational principles of digital currencies, i.e. decentralization.
Cryptocurrency experts have concluded that Google and Facebook are instituting a crypto advertising ban to reduce jeopardy resulting from scams and fraudulent ICOs.
It is difficult to differentiate between a legitimate platform and a scam therefore shut them all down.
They simply opted for an all encompassing crypto advertising ban hoping to protect their users. We should mention that they are protecting themselves from any legal jeopardy that may result from advertising criminal behavior.
The ban on big advertising entities has been damaging to most platforms. A number of blockchain startup companies have come out in support of it and have benefitted.
They argue that a ban will remove dodgy, ill-defined projects from the market thus leaving the space open for practical and legitimate startups.
Arran Stewart, the co-founder of Job.com believes that the only people hurt by a crypto advertising ban are blockchain startups that have nothing but good intentions.
His company is working on a blockchain based recruitment platform that will make it easier for employers and jobseekers to connect on a single platform.
He noted that most crypto advertisers were companies that didn’t actually have a “real” product that was worth a dime. They were simply taking up space to defraud people and steal money.
Stewart relies on private networks for advertising while promoting his Singapore-based business through word of mouth. You can make the case that word of mouth is the best method of advertising as always has been.
Catheryne Nicholson, the CEO of Blockcypher, shares that feeling. Her company provides infrastructure support for blockchain applications.
She points out that there have been a significant number of projects whose sole purpose was to induce people to invest in a fraudulent scheme. Within a few weeks the project developers disappear with the money never to be heard from again.
She argued that fraud is extremely hard to detect. Investors need to drill down and absolutely must perform due diligence as best they can.
People have been duped despite conducting a thorough investigation, so the need for caution is essential.
The decision for a crypto advertising ban will help curtail scams in the industry. This theoretically will improve the situation as a whole.
Amanda Gutterman is the chief marketing officer of ConsenSys. They represent a group of more than 700 technology experts who create applications and infrastructure based on Ethereum.
She noted that the rapid popularity of blockchain naturally attracted huge numbers of people.
Many of them were brilliant, bringing outstanding projects to the table. That said, many were also corrupt and fraudulent criminals.
While a crypto advertising ban is most unfortunate, it is understandable why social media companies took the step.
Some tech startups see this as a golden opportunity to create an advertising platform exclusively for cryptocurrency and ICO projects. Dean Anastos, the CEO of Blockchain Developers, says that bounty programs he is developing are a legitimate solution to any advertising ban.
A bounty program allows an ICO to advertise its project organically. A project will allocate a certain amount of tokens to be paid to people who share a project with their friends and social networks.
Despite strict regulations and bans by governments globally, the cryptocurrency markets continue to flourish. We believe the crypto world will continue to develop despite ad bans from Google, Twitter, Facebook, etc.
Revolutionary and cutting edge projects will get their due attention from investors as they always do.