Left Menu
Development News Edition

Companies banning crypto ads amid reputation damage fear

Twitter on Tuesday began blocking crypto ads, becoming the latest internet giant to crack down after moves by Alphabet's Google and Facebook earlier this year.


Companies banning crypto ads amid reputation damage fear
In China, which tried to stamp out crypto trading through a crackdown last year, investing in the sector remains popular. (Image credit: Pixabay)

A growing number of internet companies are banning cryptocurrency advertising, fearing reputational damage if their users are duped or left penniless, even as regulators struggle to get to grips with the fast-emerging industry.

Twitter on Tuesday began blocking crypto ads, becoming the latest internet giant to crack down after moves by Alphabet's Google and Facebook earlier this year.

Once restricted to small online chatrooms for early bitcoin backers, cryptocurrencies have since exploded in popularity and the industry has grown rapidly.

Huge billboards promoting the latest coin hangover Tokyo's streets, ads touting crypto-trading dot the London underground network, and social media platforms are full of start-ups looking to raise capital through "initial coin offerings" (ICOs), as the selling of new virtual tokens is known.

While regulators have stepped up their warnings about the risks to consumers of investing in cryptocurrencies and the potential for scams, in most jurisdictions, they are only beginning to discuss publicly how they might regulate the industry, let alone frame advertising rules.

Last week, the G20 group of nations failed to agree on specific regulatory action.

So companies are taking matters into their own hands.

"If internet companies were not already under pressure from regulators for their loose control of data privacy, they probably would not ban advertising from cryptos, which are still a grey area for many regulators," said Arnaud Masset, a crypto-currency analyst at Swissquote Bank.

Snapchat in February started removing adverts for ICOs - which regulators say lack transparency and are susceptible to fraud - a spokesperson told Reuters.

Also Read| Crypto ads to be banned by twitter as online crackdown widens

The company declined to comment on whether it would widen the ban to include individual cryptocurrencies, crypto-wallets, and unregistered exchanges, as other technology giants have done.

LinkedIn is blocking crypto-related ads, a spokesman said, although owner Microsoft does allow adverts on its other platforms.

AROUND THE WORLD

Across Asia, where the crypto frenzy is at its most feverish, firms are also restricting advertising.

China outlawed cryptocurrency exchanges and ICOs last year. Chinese internet titans Baidu, Tencent, and Weibo followed suit by curbing ads shortly after.

While Japan's government and regulators have embraced cryptocurrencies as a phenomenon that is here to stay, the sentiment was hit by a USD 530 million cyber heists of an exchange in January.

Primetime TV advertising subsequently fell, billboards on Tokyo's transport network were cut back and online companies are responding with changes to their advertising policies.

Line, Japan's most popular social media site, and the messaging app does not allow crypto-related advertising. The policy is designed to protect customers and avoid legal risks, it says.

The country's financial watchdog, meanwhile, has asked the crypto industry's new self-regulatory body to draw up advertising rules. It has not stipulated what it wants to see but it is likely that Japanese exchanges will not be allowed to mention specific currencies when advertising, while TV promotions for ICOs could be banned altogether, a source familiar with the matter told Reuters.

A spokesman for Yahoo Japan said the search engine was reviewing its policy in light of the changing environment.

Russian search site Yandex said it had not carried crypto ads for "a long time".

While online companies are prohibiting ads, there is less evidence that traditional advertising routes are under threat.

London's metro system is plastered with advertising promoting crypto-trading. Transport for London did not respond to requests for comment about its policy on advertising.

The slump in virtual currency prices this year has not rattled British punters lured in by adverts, however: A spokesman for Britain's Advertising Standards Authority said it had to date received fewer than 10 complaints about crypto ads.

LITTLE IMPACT

Cryptocurrencies, unlike most securities, do not confer ownership in the underlying business, which is partly why advertising is not currently governed in conjunction with financial authorities.

Also, regulators are reluctant to rush to impose rules on cryptocurrencies as they examine the possible benefits of the Blockchain technology underpinning them.

Many analysts expect the likes of Google and Facebook to loosen blanket bans once authorities provide guidance on how virtual currencies and the infrastructure around them will be treated.

Christie Dennehy-Neil at the Internet Advertising Bureau, a British trade body, said large online platforms often introduce policies that take "a judgment more broadly than advertising" to protect their reputation.

Also Read| Marshal island legalise cryptocurrency like bitcoin; may become legal tender

She said that the ideal case "would be for a product to be regulated and for there to be sector-specific rules for advertising". But without regulation in place, companies were sensible to act on their own accord, she added.

Crypto supporters argue the bans will have little impact.

In China, which tried to stamp out crypto trading through a crackdown last year, investing in the sector remains popular.

Also, while promotions on Twitter and Facebook may appeal to new would-be buyers, investor conversations have shifted to other platforms and chatrooms where advertising is still permitted or where information on new coins is spread by word of mouth.

The price of bitcoin fell heavily after the Facebook ads ban announcement, but the reaction to similar moves by Google and Twitter since then was muted.

"Interest in cryptocurrency and ICOs remains undiminished even in China," said Zennon Kapron at Shanghai-based financial consultancy Kapronasia.

"The decentralized nature of cryptocurrencies and investors means that it remains relatively straightforward to access information about, and invest."

In an indication of the strength of that interest, while Line may not allow any related advertising, it is currently applying for a license in Japan to operate its own cryptocurrency exchange.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION/BLOG/INTERVIEW

JNU Administration's 100-meter challenge before JNUSU

For the first time in its history, Jawaharlal Nehru University JNU Administration is seeking permanent deployment of local police to keep protesting students at 100 meters away from the Administrative Block. It would be interesting to see h...

Sentiment Analysis of Twitter users during COP25: Governments losing trust on Climate Action

Sentiment analysis of Twitter users during COP25 in Madrid, being held from December 2-13, shows widespread fear on climate change due to global warming but almost no trust on governments in meeting the emission targets. In the analysis the...

These innovators are making humanitarian response more efficient

These alarming trends prompt a call for the world to not only address the ongoing crisis but also to adopt innovative approaches to fulfill the growing humanitarian needs in such emergencies. ...

Hyderabad Encounter: A sentiment analysis of public mood on day of encounter

Sentiment analysis of twitter users revealed that they showered salutes on Hyderabad police for eliminating alleged gang rapists of the veterinary doctor but only a few believe in cops version of successive events leading to encounter....

Videos

Latest News

UPDATE 2-California power producer PG&E files amended reorganization plan

California power producer PGE Corp said late on Thursday that it has filed for an amended reorganization plan, adding that it remains on track to getting the plan confirmed before a June 2020 deadline to exit bankruptcy. The development com...

Aviation scam: Lobbyist Deepak Talwar's close aide granted bail by Delhi court

A Delhi court Friday granted bail to Yasmin Kapoor, a close aide of co-accused and corporate lobbyist Deepak Talwar, in a money laundering case related to negotiations that allegedly favoured foreign private airlines causing losses to state...

Dwayne Bravo ready for international return after change of guard at CWI

West Indies all-rounder Dwayne Bravo on Friday announced his return to international cricket, little over a year after he called it quits due to a bitter fallout with his countrys Board. Bravo said the decision was prompted by the change of...

Man threatening police officers at Paris business district "neutralised" - police

A man who threatened police officers with a knife in the Paris business district of La Defense on Friday has been neutralised, police said.It was not immediately clear whether the man was killed or wounded. Authorities told people to avoid ...

Give Feedback