Fearing damages to their reputation, more companies have started to act in banning advertisements of cryptocurrency, which is prone to frauds resulting in users getting bankrupt. The regulators of the digital currencies, however, are struggling to keep up with the rapidly growing industry.
Giant companies such as Alphabet’s Google and Facebook started to block crypto ads earlier this year, and Twitter has followed suit on Tuesday, becoming the latest internet giant to do so.
Crypto-currency has witnessed quite the uplift in recent times, as both the demand and development has increased, having previously been employed by early Bitcoin enthusiasts who operated in small chat-rooms online.
Donations and investments, or initial coin offerings (ICO’s) as they are known, of Bitcoin and other virtual currencies, have been encouraged on social media platforms in order to raise capital for companies. Not only that, ads relating to crypto-trading online have become common on the London underground network, as well as streets in Tokyo, where promotions relating to Bitcoin can be seen on huge billboards.
The risk of investments by consumers in the crypto-currency market and the scams that could result, have been relayed to by the regulators. However, despite their recent efforts, the advertisement rules seem like a distant goal in some jurisdictions, with them only starting to discuss in public, the methods to regulate the industry. Some of the companies have taken matters into their own hands, when no specific regulatory action could be agreed upon during a meeting of the G20 group of nations last week.
A Swissquote Bank crypto-currency analyst, Arnaud Masset, said in a statement that the currencies remained a gray area for many companies, following bans from advertising them. He went on to add that the ban would not have taken places, if companies weren’t already under pressure by regulators to ensure data privacy and control. The regulators have termed ICOs as not being transparent and thus, could lead to fraud, with their advertisements being removed by Snapchat in February, a spokesperson claimed. However, the inclusion of crypto-wallets, individual crypto-currencies and exchanges that aren’t registered in the ban, was not confirmed by the company, unlike other tech giants.
A spokesman confirmed that crypto-ads were also being blocked by LinkedIn, although other platforms owned by Microsoft, did allow them. Companies in Asia, which has been at the end of a lot crypto-currency activity, have also started to follow suit in restricting their ads. Last year, they were declared illegal by the Chinese government, as their ads were removed by internet giants in the country such as Baidu, Weibo and Tencent.
Japan have been more positive about the introduction, with it being termed as something that was there to stay, by their government and regulators. That optimism was affected, however, by a cyber-heist in January, on an exchange that cost around $530 million. This resulted in a decline in ads on TV and the transport network in Tokyo, as companies sought to revise their advertising policies in response. To avoid legal risks, Japan’s most popular messaging app called Line, also does not allow crypto-currency ads.