Facebook eases ban on cryptocurrency ads

In this photo, taken March 29, 2018, the logo for Facebook appears on screens at the Nasdaq MarketSite in New York’s Times Square. For the first time, Facebook is making public, on Tuesday, April 24, 2018, its detailed guidelines for determining what it will and won’t allow on its service. (Photo by RICHARD DREW / AP)

Washington, United States – Facebook said on Tuesday it was easing a ban on ads for cryptocurrencies while keeping a prohibition on initial coin offerings to raise assets.

The move comes five months after the leading social network said it was banning all ads related to cryptocurrencies like bitcoin as a way to curb scams.

To place ads on Facebook for cryptocurrencies, companies will need to be pre-approved and offer proof they have licenses or are traded on a public exchange, the company said.

“Given these restrictions, not everyone who wants to advertise will be able to do so,” Facebook product management director Rob Leathern said in a statement.

“But we’ll listen to feedback, look at how well this policy works and continue to study this technology so that, if necessary, we can revise it over time,” Leathern added.

Facebook and other online platforms began cracking down on ads for crypto-related businesses amid concerns over fraud in the burgeoning and largely unregulated sector where currencies can see huge swings.

Fraud is common in the world of red-hot digital currencies such as bitcoin.

Bitcoin. AFP File Photo

Earlier this year, the United States Securities and Exchange Commission shut down an initial coin offering by a Texas company called AriseBank.

AriseBank was accused of relying on celebrity endorsers such as boxer Evander Holyfield and social media to cheat investors out of $600 million of its goal of $1 billion for a currency it called “AriseCoin.”

Initial coin offerings – used by some startups to raise billions of dollars – still would not be able to advertise on Facebook.

Twitter, Google, and Snapchat have announced similar bans.

The British government early this year called for global regulation of controversial virtual currencies like bitcoin.

Bitcoin and similar forms of virtual cash are independent of governments and banks and use blockchain technology, where encrypted digital coins are created by supercomputers.

The virtual currency is not regulated by any central bank but is instead overseen by a community of users who try to guard against counterfeiting.   /kga