Facebook’s Crypto Ad Ban Reversal Reignites Speculation Over Coinbase Takeover
Facebook announced Tuesday it would reverse its controversial ban on cryptocurrency marketing, sparking further speculation that the social media giant was planning a spectacular entry into the blockchain arena. Several reports have floated the idea that Facebook has zeroed in on Coinbase, one of the world’s most prominent digital currency exchanges.
Facebook Lifts Ad Ban
Hacked reported Tuesday afternoon that Facebook will now permit approved vendors to market their cryptocurrency services on its website. The decision followed a comprehensive six-month ban that targeted all aspects of the digital currency market, from initial coin offerings (ICOs) to virtual exchanges.
Facebook originally banned crypto adverts in January, noting that they were often associated with fraud and other deceptive practices. The decision was universally condemned by the blockchain industry, which criticized the social media giant’s inability to distinguish legitimate projects from fraudulent ones.
Under the new guidelines, Facebook will vet applicants carefully to ensure users aren’t engaging with fraudulent companies. This includes reviewing “any licenses they have obtained, whether they are traded on a public stock exchange, and other relevant public background on their business,” Facebook said in a company post.
“Given these restrictions, not everyone who wants to advertise will be able to do so,” the Menlo Park, California-based said. “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.”
Facebook’s Crypto Ambitions
The lifting of Facebook’s ad ban suggests the company is pivoting toward blockchain and cryptocurrency as a future business model. Last month, The Economist ran a story linking Facebook to a possible acquisition of Coinbase, a San Francisco-based digital currency exchange with more than 13 million users.
This story was later picked up by The Independent, a U.K. news publication, which interviewed blockchain experts on the possibility of a Coinbase takeover. Experts say that acquiring Coinbase would boost Facebook’s value and utility almost instantly. The technology giant’s involvement would also bring added legitimacy to the cryptocurrency market at a critical time in its maturation.
Rumors that Facebook is about to make a big splash in the crypto world aren’t entirely unfounded. Back in May, the company announced its largest ever management reshuffle, under which a new blockchain group was designated. This new exploratory group reports directly to Facebook CTO Mike Schroepfer.
At the time, some had speculated that Facebook was planning to launch its own digital currency to be used on the social media network. David Marcus, who formerly headed Facebook Messenger, said he was “starting from scratch” to determine how blockchain can be used across the social media platform.
In addition to launching its own digital currency, Facebook could use blockchain technology to prevent further breaches into people’s privacy. The company has faced criticism for failing to protect the personal information of up to 87 million users in a recent data breach that was carried out by “malicious actors.”
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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