Google will ban advertisements for certain financial products, including cryptocurrencies, the Internet giant announced Wednesday. The move comes amid increased scrutiny of the fast-growing market for digital currencies like bitcoin.
In a blog post on the company’s website, Google’s Director of Sustainable Ads Scott Spencer cited the “unregulated” and “speculative” nature of many of the financial products being advertised. Spencer mentioned cryptocurrency advertisements as an example of “new threats” to the Google user experience, along with ads for addiction treatment centers and online gambling services.
Google’s new policy will take effect in June. It mirrors a similar announcement from Facebook and reflects a broader push by the advertising giants to rebuild user trust in their platforms. Last year, Google struggled to address advertisers’ concerns that ads were being run alongside objectionable content.
“Google’s decision to ban cryptocurrency ads is an implicit acknowledgement that they cannot identify legitimate projects in this space at scale,” says Paul Makowski, chief technology officer of malware-detection startup PolySwarm. Makowski says PolySwarm’s users have been “inundated” with fraudulent advertisements.
The change comes amid a growing backlash against cryptocurrency products, particularly initial coin offerings. ICOs are used to raise money by companies offering investors a “first bite” at an upcoming cryptocurrency.
In 2017 alone, there were over 900 ICOs. These raised billions of dollars for their promoters but also caught the attention of the Securities and Exchange Commission. According to the SEC, many ICOs are actually securities offerings.
That means they need to register with the agency and comply with traditional securities regulations. The SEC’s concerns appear well founded, given that nearly half of 2017’s ICOs have already failed. And just last month, reports surfaced of a widespread investigation into the promoters behind several recent ICOs.
Reactions from cryptocurrency-related companies have been mixed. Adam Bergman is the founder of a company that allows investors to use their retirement funds to purchase cryptocurrency. He says he was “somewhat surprised” by the Google announcement, but he believes Google and Facebook “will ultimately modify their ban on lawful crypto related products and services as cryptos become more regulated.”
PolySwarm’s Makowski says the policies make sense, but he’s concerned they may hurt companies operating legitimately. He says his company routinely reports fraudulent ads to Google, but the search company has struggled to respond quickly.
Instead of screening individual ads, says Makowski, Google has opted for a blanket ban on anything related to cryptocurrencies. “There’s a balance to be struck and they’ve chosen the option that errs on the side of protecting the public,” he says.