Social media has a great importance today, and so cutting ads regarding crypto start-ups, and ICO issuers is a thing to worry for all regulators. Facebook has announced that advertisements regarding all financial products including bitcoin and ICO’s are banned.
According to Facebook, these ads are misleading people and so are required to be banned. Stakeholders are facing a big problem due to such harsh step of Facebook. Stakeholders are still able to survive as regulators of Facebook are supervising ads of the company. Johanna R. Collins-Wood who is an associate at Pepper Hamilton and also one of the members of block chain group has declared it as the positive sign for crypto entrepreneurs.
Many people who are supporting such ads have raised their support for not taking such ads as susceptive. According to them, ads are viral when it is about to seek attention and provide required information to ordinary people. Entrepreneurs and ICO issuers are informing knowledge of claims through marketing.
According to Securities and Exchange Commission, Commodity Futures Trading Commission who are members of Senate will check if ads are real or fraud. Members of Senate also made clear that if they have reported case against company everything even their advertisements on social media will be considered and reviewed to know actual position.
L’Autorite Des Marches Financiers who is a stock market regulator said that they are going to consider such advertisement on cryptocurrency seriously and work on it. Advertisements will be used while reviewing cases for any crypto industry.
Complaints against misleading crypto ads
According to financial regulators, there are no clear points or guidelines under which ads are considered as fraud. Carl Johnston who is working as security lawyer said that there are many things found while declaring any advertisements fraud or misleading. Some of them are very undisguised, and so it should not be displayed on media.
Last year there was a case where the logo was stolen and used as an advertisement on Facebook. New Zealand newspaper has reported about it and according to Former Prime Minister he has investigated in bitcoin which was fake. It is just not in New Zealand as Continents’ securities in Australia have reported nearly 1200 such scams. Japanese exchange coin check was hacked for %5333 million, and it also ran a TV ad campaign.
Industry observers have said that more money is spent on ads instead of coin check. SBI holdings CEO has called such company scum for what they are doing. Regulators are looking for regulation which must be made clear for such advertisements. Johnston has made it clear that there must be some laws for misleading ads so that company does not show false ads.
Federal Trade Commission is silent on allegations
Federal Trade Commission is known as government agency who are looking such complaints in the US. According to Johnston, he does not have much idea about such agency, but he follows everything about ICO’s and added that he had not seen FTC’s name lot. As said by New Zealand’s Advertising Authority there are no complaints regarding the crypto ads.
UK’s authority has received less than ten such complaints which have misleading ads regarding cryptocurrency and investigation on it does not come with any results. UK’s spokesperson has pointed to FCA as they are in charge of commercial advertisements which was denied by FCA. According to Collins-wood clients who are in need of such ads must follow securities law as it will eliminate all nasty issues regarding advertisements on social media.
Facebook ban on ICO ads: How start-ups are affected
Russia’s VK which is same as Facebook has also supported on cutting crypto ads last year. But in August 2017 reports were that such ban had been removed so that more opportunities help cryptocurrency market to grow. There are millions of people on social media who are following cryptocurrency market. But according to VK if any ads are violating rules, it would get rejected as they are not supporting such misleading promotions.
A Twitter spokesperson has not passed a single comment on an advertisement of cryptocurrency as no other social media is against it. Google has its own specific rules and regulations which will accept crypt ads according to it. Ecosystem might have minimal impact on social media platforms.
CEO of bit Flyer, Midori Kanemitsu who runs ad campaign of both social media and TV has said that ban on such ads on Facebook have less impact. According to him, TV ad campaign has more effect on people, and so he is very cautious with an advertisement on TV. He said that they are not in support of advertising ow risk or substantial returns type of ads. They carry out internal regulatory procedures to avoid misleading ads as they do not have rights for legal restrictions.
