Google Follows Facebook’s Lead in Banning Crypto Advertising
Cryptocurrencies declined on Wednesday amid news that Google is pursuing a ban on all digital currency-related advertising. The crackdown on digital ads could have far-reaching consequences on all facets of the market, from initial coin offerings to online exchanges.
Google Bans Crypto Ads
Beginning in June, all cryptocurrency-related advertising on Google will be banned, the company announced on Tuesday in outlining its new policy for financial services-related marketing.
“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area we want to approach with extreme caution,” Scott Spencer, Google’s director of sustanable ads, told CNBC in an interview.
In 2017, Google removed more than 3.2 billion ads that violated its policies, compared to 1.7 billion the year before.
In addiiton to cryptocurrency, new restrictions are also being rolled out on marketing related to contracts for difference (CFD), rolling spot forex, financial spread betting and binary options, the company said.
Alphabet Inc., Google’s parent company, generates roughly 84% of its total revenue from advertising. This suggests the company may expand its restrictions in the future to promote consumer safety.
Like many other industries, crypto firms rely heavily on Google to promote their products and services. Google and Facebook alone account for up to 70% of the online digital ad market.
Earlier this year, Facebook announced it would ban all marketing related to cryptocurrency as part of efforts to prevent marketing that is “frequently associated with misleading or deceptive promotional practices.”
Cryptocurrency Market Falls
The cryptocurrency market fell by as much as $20 billion on Wednesday, with bitcoin hitting a low of around $8,600.
In addition to Google’s advertising ban, markets were rattled by fresh calls from the International Monetary Fund (IMF) to regulate the digital asset market.
In a Tuesday blog post, IMF chief Christine Lagarde said cryptocurrencies have the potential to become the newest vehicle for money laundering and terrorist financing. She raised the example of the AlphaBay, a dark web marketplace that laundered more than $1 billion before it was brought down.
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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