Company says goal is to protect consumer from fraud
Google will ban all cryptocurrency advertising and initial coin offerings (ICOs) as part of a broader effort to protect consumers from the hidden cheating behind high-risk, rapidly growing financial products.
Cryptocurrencies, such as bitcoin, and ICOs –crowdfunding mechanism that takes digital currencies as a base — have gained popularity, but the industry continues to be loosely regulated and vulnerable to fraud.
Google has announced that it will restrict advertising of “unregulated or speculative financial products,” a generic ban that includes cryptocurrencies.
The restrictions will also apply to “contracts for difference” (CFDs), binary options transactions — which allow investors to speculate on rising or falling prices — and foreign exchange products. The changes will take effect in June, the company announced.
Google’s decision will limit the ability of cryptocurrency exchanges, consulting firms and digital wallet operators to reach new customers.
Facebook had already adopted similar measures in January when it announced that it would exclude all advertising from cryptocurrencies and ICOs, stating that many of the ads were being used to elude potential customers.
“As consumer trends evolve, our methods to protect the open network improve, and online cheating also advances,” said Scott Spencer, Google’s director of sustainable advertising, in a post on the changes.
Google reported that in 2017 it removed more than 100 ads per second — about 3.2 billion — for violating its regulations.
Search services and social media platforms have recorded high advertising of complex financial products, and often heavily leveraged.
Google has announced a complete ban on binary options advertising — bets on which financial indices will rise or fall. He said advertisers who offer online transactions with other risk instruments — including CFDs and bets on financial spreads — will have to be licensed by the regulatory authorities in the countries to which ads are directed and certified by Google if they want to use the company’s advertising service, AdWords.
The company added that it would prohibit advertising from aggregators and affiliates selling these products.
Binary options and CFDs have recently been criticised by regulators in the UK and the European Union, who are concerned that amateurs may suffer heavy losses when operating with these products.