Twitter to ban crypto ads as online crackdown widens

LONDON: Twitter Inc is to ban cryptocurrency advertising, joining Facebook and Google in a clampdown on the industry over the risk of giving publicity to potential fraud or large investor losses.

The prohibition will cover advertising of initial coin offerings (ICOs) - crowdfunding used to raise cash by creating new coins - as well as token sales and crypto-wallet services, the San-Francisco-based firm told Reuters.

The new policy, whose implementation date was not announced, will also - with limited exceptions - stop crypto-exchanges from advertising on its platform.

Twitter said this month it was taking measures to prevent crypto-related accounts from “engaging with others in a deceptive manner”, but had faced calls to go further after bans from Facebook Inc and Alphabet Inc’s Google.

Facebook has restricted crypto-related adverts, while Google earlier in March announced a ban that comes into force in June.

Regulators have stepped up warnings that bitcoin and other virtual currencies are highly speculative, some potentially fraudulent and that investors should be prepared to lose everything.

But last week the G20 group of rich nations failed to reach a consensus on how to supervise them.

Advertising of cryptocurrencies has boomed as demand for investing in them soared, with everything from London’s transport network to Japanese television featuring adverts for the virtual coins or ways to trade them.

“With the increasing number of ICOs coming to market it is an impossible task for anyone, much less platforms like Twitter or Facebook, to keep on top of which ICOs and cryptocurrencies are genuine versus frauds,” said Zennon Kapron, director of financial consultancy Kapronasia.

“Although certainly ICO advertising must have been a significant source of revenue for Twitter, the repercussions of fraudulent activities just weren’t worth the risk.”

The price of bitcoin is down more than half to around $8,000 from a December peak of almost $20,000 as fears of a regulatory clampdown spooked investors. News of the Facebook and Google bans also knocked the price.

Bitcoin fell almost 5 percent on Monday to $8,062 on the Luxembourg-based Bitstamp exchange.

Ethereum and Ripple’s, the second and third biggest digital currencies by market capitalization, have tumbled this year too.

While critics call cryptocurrencies a ponzi scheme that will end in tears for the majority of investors, supporters say the coins are backed by powerful new technology that can replace traditional fiat currencies and upend the existing banking system.