Regulators have yet to define advertising rules for cryptocurrencies. As a result, companies have to decide on their own about these policies. Back in the day, cryptocurrencies were restricted to small online chat rooms for early Bitcoin backers. Since then, a lot has changed as we saw the price of Bitcoin hit the $19,000 mark in December 2017. Due to the speculative nature of the cryptocurrency, a growing number of Internet companies are banning cryptocurrency advertising.
Many fear that this will cause damage to the platform’s reputation, especially if their users are left penniless after following through with the cryptocurrency advertisement. In fact, regulators often warn cryptocurrency enthusiasts that they are on their own when investing in cryptocurrencies. Twitter has also been beginning blocking cryptocurrency advertisement. This makes them the latest Internet giant to take action against cryptocurrency advertisement similar to Google and Facebook moves.
Governments on high alert
The cryptocurrency fever is real. You can see this in countries such as Tokyo, which have huge billboards promoting the latest cryptocurrency. In the London Underground, there are huge ads promoting cryptocurrencies as well. More online platforms are being utilized to promote cryptocurrencies or ICO. ICO is also known as a method to sell new virtual currencies. In any country that has a high volume opportunity for cryptocurrencies, the government often warns investors that there are risks which come with getting into the cryptocurrency space.
Only recently the government started to break their silence about the cryptocurrency space and how they intend to regulate the space. As they are only starting their discussions on how they can regulate the industry, online platforms have the responsibility to protect their users against scams in the cryptocurrency space.
In the recent G20 meeting, these countries failed to come up with coordinated regulatory action. Therefore, online platforms have no other choice but to regulate the space on their own. This is probably one of the supporting reasons as to why they are banning advertising for cryptocurrencies. As this industry remains a grey area for regulators, social media companies are implementing regulations that will put them on the good side of regulators.
Meanwhile, Snapchat has begun removing any advertisements related to ICO back in February. One reason is that the management believes that these advertisements lack transparency and can lead to high-level fraud. However, it remains to be seen whether the company will ban individual cryptocurrencies or cryptocurrency wallets. Similarly, LinkedIn is also blocking cryptocurrency advertisements. However, Microsoft is following the road less taken by allowing cryptocurrencies advertisements.
In Asia, cryptocurrency has infatuated users within the region. However, firms within the region are also restricting advertisements for cryptocurrencies. This is more prominent in China where they effectively outlawed cryptocurrency exchanges and ICO back in September 2017. Similarly, the Chinese Internet giants Baidu, Tencent, and Weibo have also banned cryptocurrency advertisements.
In Japan, the government is well known to receive the emergence of cryptocurrencies well. In fact, Bitcoin is a legal mode of payment in that country. However, the government was forced to reevaluate their decision when a $513 million cyber attack was made on their cryptocurrency exchange. As a result, prime TV advertising was cut significantly, and the billboards on their Tokyo transport network were also cut back.
Line, Japan’s most popular social messaging app, does not allow any cryptocurrency advertising. Furthermore, the country itself has a body which helps to regulate the cryptocurrency industry. The goal of this body is to help social media platforms and businesses to create advertising rules for cryptocurrencies. Despite the rules in Japan, it is highly likely that the exchanges will be allowed to mention specific currencies when advertising. It is also possible that ICO advertising may be banned completely.
Yandex, Russia’s most popular search site, stated that they have not engaged in any cryptocurrency advertisement for a long time. Russia is well known to not welcome cryptocurrencies.
With cryptocurrencies, things get a little bit more complicated because people who buy tokens do not gain ownership in the business. This is the main reason why advertising is not currently governed by financial authorities. The slow response of regulators on the advertising policy also makes the situation more complex. However, could experts believe that if regulators define the space better, Facebook, Google, Twitter, and LinkedIn will open up their advertising space for this type of offering?
On top of that, experts believe that it is important for a product to be regulated, and sector-specific rules for advertising must be established. These online social media platforms are doing the right thing to self-regulate their platform.
Advertising ban is no match for the crypto industry
Despite being banned in China, cryptocurrency is still highly popular within the region. Even if there are platforms that have banned cryptocurrencies advertisements, they are simply shifted to other platforms and chat rooms such as Telegram.