Facebook is cracking down on cryptocurrencies by using one of its most powerful tools: access to its massive advertising megaphone.
The social networking giant said Tuesday that it will not display ads for financial products that “are frequently associated with misleading or deceptive promotional practices,” specifically virtual currencies and “initial coin offerings,” a fundraising tactic that new cryptocurrencies use to attract fresh investors.
“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, a product management director at Facebook, in a blog post.
The spectacular spike in prices last year of bitcoin and many alternative cryptocurrencies has sparked a surge of interest among investors and companies of all kinds. The exuberance has led to schemes that, in some cases, promise triple-digit returns and have attracted the scrutiny of the Securities and Exchange Commission.
“Market professionals, especially gatekeepers, need to act responsibly and hold themselves to high standards,” SEC Chairman Jay Clayton said in a recent speech. “To be blunt, from what I have seen recently, particularly in the initial coin offering space, they can do better.”
Facebook provided a number of examples to illustrate its new policy, such as ad copy that exhorts users to convert their retirement funds into bitcoin or promotions for “no-risk” cryptocurrency.
The announcement comes weeks after Facebook chief executive Mark Zuckerberg acknowledged the potential of cryptocurrencies to wrest power away from “centralized systems.”
“They come with the risk of being harder to control,” Zuckerberg said in a Facebook post. “I'm interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”