Any advertisement that seeks to promote crypto-currency products and services will be banned on Facebook, the company said
There are a number of companies, according to Facebook, who are not behaving in “good faith” while eulogizing the merits or purchasing virtual currencies even though it said that it was receptive to emerging technologies.
There has been the emergence of a number of ne virtual currencies which want to ride the wave of eh recent phenomenal rise in price of bitcoin.
Any ads that are missed by the security measures of the company were asked to be reported by the users of Facebook.
Not every single ad of cryptocurrency would be caught by it, Facebook admitted.
“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception,” wrote Rob Leathern, product management director for Facebook Business.
“That said, there are many companies who are advertising binary options, ICOs and crypto-currencies that are not currently operating in good faith.”
There are a set of investors who get lured into purchasing new virtual coins through the ICO – initial coin offering, and invest money in them even before they are launched, as they hope that someday, the virtual currency would gain price like bitcoin has.
There are a large number of regulatory burdens in traditional methods of raising cash – through an Initial Public Offering (IPO) for example. But there is hardly nay regulatory requirement for raising cash through ICO and many companies have raised great sums of money in this way.
And this is the reason that many of the ICO companies have simply vanished and there is little the “investor” can do about it. It needs to be stressed the people buying into ICOs are not the typical investors because they are not given any genuine share in the company.
Pairing a cryptocurrency ad with celebrity endorsement and using Facebook as a mode to advertise for a new scheme is good of creating a “buzz” for a new scheme. Last year, there was high criticism of retired boxer Floyd Mayweather for promoting a cryptocurrency which later faced a lawsuit on allegations of deception.
While regulators in many countries have warned investors into getting associated with ICCOs, China and south Korea have already banned raising money using an ICO.
Assets of a U.S. firm that raised about $600 million through IO have been seized this week by the US Securities and Exchange Commission (SEC).
Its new policy was “intentionally broad” and would evolve over time, Facebook said.
It states: “Ads must not promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings, or crypto-currency.”
(Adapted from BBC.com)