Few will mourn the barrage of ads for shady ICOs (initial coin offerings) that promise 10x returns. But the cryptocurrency space is a booming new economy, and such an all-encompassing ban is sure to hurt some legitimate crypto businesses.
Blockchain might just be the next big thing in finance, and blockchain-based Uber and Airbnb are already being envisioned. In fact, you’d be hard-pressed to find an industry that a blockchain-based startup isn’t threatening to disrupt. Surely, not all of these businesses are scams. So why ban them all from advertising on the internet’s major platforms?
Trevor Gerszt, CEO of cryptocurrency IRA company CoinIRA isn’t afraid of the bans, though he doesn’t exactly welcome them, either. “It is frustrating that companies like Coin IRA who offer legitimate investment products and have done everything we have to do to be in compliance are punished along with nebulous ICO schemes,” he told Mashable via e-mail.
Ultimately, however, the “ad bans won’t affect larger, more established, and more reputable cryptocurrency businesses as much as they will affect smaller businesses who are looking to use advertising to gain greater name recognition,” he claims.
That’s the trick: For a cryptocurrency startup, the ad ban means it may be harder to get funded via an ICO. And for strictly crypto-related businesses, such as crypto exchanges and wallets, the ad bans are bad news. But blockchain-based startups will be able to advertise their products on Google and Facebook, as long as they don’t mention the crypto aspects of it, such as ICOs, tokens, wallets and such.
I’ve contacted Google, Facebook, and Twitter regarding the crypto ad ban. “Our new policy applies to the advertisement of cryptocurrencies and related content (including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice),” a Google spokesperson told me. “This will include ads for aggregators and affiliates for cryptocurrencies,” but the policy “will not apply to other blockchain technologies that are unrelated to cryptocurrencies and ICOs,” he said, while noting that the ads also must adhere to Google’s other policies.
Facebook hasn’t responded at the time of publish, and Twitter, which hasn’t publicly announced any ban yet, had no comment.
Interestingly enough, several crypto-related companies I’ve contacted said they actually welcome the ad ban. Darren Marble, the CEO of fintech marketing firm CrowdfundX, which is marketing the widely publicized KodakCoin, is one of them.
“The only people who are disappointed in Twitter’s purported ban of crypto ads are the scammers and con artists”
“The only people who are disappointed in Twitter’s purported ban of crypto ads are the scammers and con artists. The big money raised in ICOs is relationship-based, and the most legitimate issuers are well connected to active crypto and blockchain funds. I think the ban on crypto advertising is actually positive change for the industry, and will help clean up a lot of the garbage,” Marble told me via e-mail.
Nicolas Van Hoorder, CEO and co-founder of cryptocurrency tracking app Delta, isn’t particularly worried, either. “Twitter, Facebook and Google want a better ad experience for their users, and the cryptocurrency community wants legitimacy as a financial market. Their restrictions are part of a gradual process to filter out illicit activities from genuine companies with innovative products,” he told me via e-mail.
The market will eventually stabilize and “misleading activities” will be weeded out, he claims. Meanwhile, “the focus for companies going through ICOs should be on building great products and showing evidence of their value. Then platforms should gladly allow advertising for these products, whether it’s crypto or not,” he says.
In a way, it’s no wonder that legitimate, blockchain-based startups aren’t afraid of the ad ban. Many of them have to actively fend off investors; some, like Theta and Gems have recently cancelled ICOs, largely due to raising too much money in private pre-sales.
While some startups that don’t have access to Silicon Valley’s VC wealth will undoubtedly be hurt by the inability to advertise their token sales, it appears that overall, the blockchain space is so hot right now that even a wide-ranging ad ban won’t kill or even hurt it — perhaps only slow it down a little.
Disclosure: The author of this text owns, or has recently owned, a number of cryptocurrencies, including BTC and ETH.