Facebook Bans Crypto, Because They Know What Is Best

Facebook has decided to ban all ads for bitcoin, cryptocurrency and initial coin offerings (ICO).

Digital marketing is an $80 billion a year industry. One of the largest players, Facebook, collects every bit of information about you they can to use to an advertiser's advantage according to Michelle Ray, Director of Communications for Algebraix Data, which has developed a permission-based marketing platform fueled by their own cryptocurrency, the ALX token. On Facebook ads are placed in your newsfeed without your consent or agreement based on your accumulated activity on the platform. Now, they are not only selling your data to advertisers, they are deciding that you aren't smart enough to see ads about cryptocurrency.

Ray along with leaders of the Digital Assets Coalition of America (DACoA), Jared Bambis and Derek Ruffner, feel this decision may have been made for several reasons. Whether is is pressure from government agencies, bad actors making the news, suppressing disruption to their business model or Facebook hinting at its own interest in crypto-technologies remains to be seen.

Currently, Facebook is citing bad actors in the space as the primary reason for the decision. According to Facebook Product Management Director Rob Leathern:

"We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception," he wrote. "That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith. This policy is intentionally broad while we work to better detect deceptive and misleading advertising practices, and enforcement will begin to ramp up across our platforms including Facebook, Audience Network and Instagram. We will revisit this policy and how we enforce it as our signals improve."

Estimating that Facebook is punishing 90% of the industry over the well publicized bad acts of 10% who may be bad players, Ray notes there is not any guidance or consistent regulation on coin offerings. The SEC has utilized the Howley Test to find Munchie in violation, shutting down their Initial Coin Offering (ICO). The agency also shut down Arise Bank's ICO for fraudulent practices. These situations make headlines and may be influencing the SEC and consumer protection groups to pressure Facebook to take action according to Ray.

Bambis and Ruffner assert regulations that could protect consumers already exist and could be applied to cryptocurrencies. Bambis says while crypto is a new and emerging technology, it is also a class of investment. Appropriate existing regulations applied to other investment vehicles could be applied to the crypto framework to help define business practices and norms.

All three say that cryptocurrency is the new digital Wild West. Ruffner likens it to the early days of the Internet. Ray positions it as an engine for disruption that "has the potential to upend the revenue models of any number of industries to include Facebook and Google". In any case, all agree that "buyer beware" is the best advice and consumers need to educate themselves before considering an investment. Seems like good advice with any investment, right?

Ruffner adds that tools for rating crypto investments using algorithms, are starting to emerge and a low level of regulatory guidance could help improve these measures. He cited the Weiss Cryptocurrency Ratings as one emerging resource for consumers. These types of measures exist for other investment vehicles and as the measures for crypto improve, it will help weed out bad actors.

Bambis says there are some good educational resources out there. Ruffner cited Andreas Antonopoulos as a non-biased single source who has developed a series of instructional videos and is involved in educating lawmakers on crypto.

All three look forward to being a part of bringing this technology mainstream. Ray has been educating and advocating cryptocurrency on her social media feeds for years and talks eloquently about creative disruption. You can follow her on Twitter @GaltsGirl and Algebraix Data at @ALXTOKEN.

Bambis and Ruffner look forward to using their new organization to promote good policy on digital currency at the state and federal level. They also are excited to support positive disruption and educate the public on good decision making in the crypto space. You can follow their work at their website.

For now, you will need to discover your own resources if you want to explore the crypto market. Despite all the data that Facebook collects, for now they will not allow the digital currency companies to reach out to you. Because after all, you may not know what's good for you.

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