Facebook Ad Ban Marks Cryptocurrency Future at Risk?

Facebook has recently created a buzz when said that Facebook will ban any advertising promoting cryptocurrency products and services. Along with it will prevent people from advertising the “financial products and services frequently associated with misleading or deceptive promotional practices”.

Why Did Facebook ban Cryptocurrency Ads?

Facebook has taken the step to protect the reliability of its advertising platform, which over the past one year has been under threat for enabling Russian propaganda and other inappropriate content.

However, Facebook’s board consist of directors, that includes two investors, Marc Andreessen and Peter Thiel, whose firms have been prominent investors to crypto currencies and are strong crypto backers. Facebook Messenger boss, David Marcus, is also on the board at an important crypto exchange Coinbase. Therefore there is a possibility that Facebook themselves might come up with their own crypto currency.

Growth in the ICO Offerings

Recently lot of crypto currencies have evolved after Bitcoin had a great run up and its value increased significantly. Further, some companies are using initial coin offering to raise great amount of funds, without the regulatory burden associated with raising cash though more traditional investment channels.

On the other hand, many investors are looking to buy new cryptocurrencies before they get launched in the hope that one day they will become worth a lot more money like Bitcoin.

Moreover, a person raised money to launch a cryptocurrency for labelling fruit and vegetables had disappeared overnight. Earlier a developer had launched “Ponzicoin”, a cryptocurrency that was explicitly and transparently a pyramid scheme. Therefore, the regulators worldwide are examining the cryptocurrency space, as reports of different scams have increased.

Recent Scams Unearthed

The US Securities and Exchange Commission (SEC) this week had seized the assets of a firm that had raised $600m in its ICO. Further, raising money using an ICO is banned in South Korea and China, and regulators in other countries are warning against getting involved in this space. Even RBI has warned the Indian investors to stay away from the crypto world.

Overall, even if the biggies like facebook and any other back out or the cryptocurrency trade comes under some regulation. It would not mean that the new space that cryptocurrency has created will go away, but the new transformed and regulated cryptocurrencies market might evolve.