Social media behemoth Facebook Inc. (FB), which had banned cryptocurrency advertisements earlier this year, has partially reversed its position. In a post on its site, Rob Leathern, Facebook product management director, stated that the advertisers wishing to place cryptocurrency-related ads on the service would have to submit an application to an internal team that maintains a list of pre-approved advertisers. The application would ask them to detail specifics relating to the product, such as whether it has been listed on a public stock exchange or whether it has obtained licenses. Ads for binary options and initial coin offerings are still banned on the service, however. (See also: Facebook Bans Ads For Cryptocurrencies And ICOs).
“Given these restrictions, not everyone who wants to advertise will be able to do so,” Leathern wrote and added that the company plans to revise the policy based on feedback in the coming months. Facebook was among a slew of major technology companies which banned crypto-related ads earlier this year stating that companies which promoted these “products did were not acting in good faith.” (See also: Google Bans Crypto Mining Extensions).
Why Did Facebook Change Its Mind?
The change in Facebook’s stance comes as the bitcoin craze from earlier this year has subsided. The price of a single bitcoin is down by more than 50% since the beginning of this year and the cryptocurrency no longer dominates Google searches. The SEC has also begun cracking down on ICO scams and sounded several warnings about policing the crypto arena. There is talk of regulation for cryptocurrencies. Regulation will legitimize financial products, such as ETFs, and blockchain services for average investors. In turn, this could translate into additional revenue for Facebook’s ads division.
As online publication Recode points out, Facebook itself has also jumped onto the blockchain bandwagon. David Marcus, who was previously chief of the company’s Messenger service, is now spearheading its initiative into the technology. Alphabet Inc. subsidiary Google (GOOG) and Twitter Inc. (TWTR) followed suit after Facebook banned crypto ads earlier this year. It remains to be seen whether they too begin allow ads related to cryptocurrencies on their platforms.
Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns small amounts of bitcoin and litecoin.