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Cryptocurrency merchants are reinvested in valuable advertising space on social media, after
Facebook
Inc.
FB 1.35%
relaxed a ban outright advertising industry.
The tech company totally banned these ads in January, after a spike in the price of bitcoin and other cryptocurrencies led to a proliferation of new cryptocurrency products, some fraudulent, of some kind. other legitimate ones. Businesses
Alphabet
Inc.
GOOGL -0.58%
Google,
Twitter
Inc.
tWTR 1.52%
and
Break
Inc.
BREAK -0.76%
Snapchat soon followed with their own bans.
Facebook will maintain its ban on advertising on initial coin offers, which have recently gained popularity. In an ICO, a company creates a new virtual coin or token and offers it for public sale.
Cryptocurrency companies that will have the opportunity to advertise on the platform will be at the discretion of Facebook. The company has not detailed the criteria that it plans to use.
"Eligibility may be subject to the terms and restrictions that Facebook may decide," says the company on its cryptocurrency product integration application form.
Facebook said its initial ban on cryptocurrency advertisements was "intentionally wide" as it was working to "detect deceptive and misleading advertising practices." The company promised to review the policy once it had scanned the existing ads that were violating its ban on associated financial products. with scams.
Promotional efforts for cryptocurrencies have been criticized by federal and state regulators in recent months. In November, the Securities and Exchange Commission warned investors of the risks incurred by celebrity-backed ICOs and encouraged investors to "look for potential investments rather than relying on paid mentions of artists." , sportsmen or other icons.
Before the crackdown, celebrities including Paris Hilton and retired boxer Floyd Mayweather Jr. had appeared in commercials touting crypto products.
Some fraudulent ICOs closed by regulators do not even bother to pay celebrity endorsers, or even refer to them by their names or titles when they use their photos.
Texas regulators stopped a coin offer last month that included "customer testimonials" with photos of Prince Charles and Jennifer Aniston. Another ploy stopped by Texas regulators featured a photo of Ruth Bader Ginsburg, a Supreme Court justice, and former US Attorneys General as the alleged legal team of the OIC. None of these celebrities or government officials were involved in the ICOs.
An analysis by the Wall Street Journal last month revealed that one in five digital coin offers shows the characteristics of fraud.
As part of its investor education efforts, the SEC even created its own fraudulent ICO site – dubbed HoweyCoin, an ironic reference to a well-known securities law case – to demonstrate how easy it is to to separate involuntary investors from their money. Help for an urgent sounding language and a stylish website.
People who click on the "Buy Parts Now!" Link are redirected to an SEC web page that says, "If you have responded to an investment offer like this, you may have been a victim of A scam.
Write to Gabriel T. Rubin at [email protected]
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