Facebook Less Worried About Crypto Ads Now That Its Own Cryptocurrency Is in the Works

On Wednesday (May 8), Facebook announced a few important updates to its advertising policies related to "blockchain, cryptocurrency and financial products and services."

The Origin of the Outright Ban on Crypto-Related Advertising

On 30 January 2018, Facebook announced that it had created a new policy (called "Prohibited Financial Products and Services") that disallows ads that "promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings and cryptocurrency." It acknowledged at the time that this complete ban on all crypto-related ads was perhaps a bit too drastic a measure:

"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."

Allowing Crypto Ads but Only From Pre-Approved Advertisers 

On 26 June 2018, Facebook said that it had updated its "Prohibited Financial Products and Services Policy" to "allow ads that promote cryptocurrency and related content from pre-approved advertisers" whilst still prohibiting "ads that promote binary options and initial coin offerings." Any business wishing to advertise crypto-related products and services had to prove that it was eligible by filling out a form called "Cryptocurrency Products and Services Onboarding Request" as well as as provide proof of ownership of the domain(s) associated with the application.

Facebook's Focus on Blockchain and Cryptocurrency

The first time we got a hint of Facebook's interest in cryptocurrency was on 4 January 2018 when CEO Mark Zuckerberg said in a post on his Facebook page that one of his personal missions for 2018 was to learn more about this subject. 

And then in May 2018 the world first found out that Facebook was getting serious about blockchain technology. On 8 May 2018, in a post on Facebook, David Marcus, the former head of Messenger, who was at that time also a board member (since December 2017) of crypto exchange Coinbase, revealed that he was leaving that role to set up a new group focused on exploring applications of blockchain technology across the whole of Facebook.

On 13 December 2018, Cheddar reported that Facebook’s blockchain group is planning to "potentially disrupt the entire payments industry":

"At a private dinner Facebook hosted during a recent crypto conference, one attendee told Cheddar that Facebook employees pitched the idea of creating a decentralized digital currency for the social network’s 2 billion users."

Several days later, Bloomberg reported that Facebook was creating its own cryptocurrency (a stablecoin) for money transfers within its highly popular messaging app WhatsApp. Roughly, two months later (28 February 2019), the New York Times confirmed Bloomberg's earlier story, and said that, according to its sources, this project was "far enough along that the social networking giant has held conversations with cryptocurrency exchanges about selling the Facebook coin to consumers."

Then, around one month ago, Nathaniel Popper, one of the two journalists who wrote the report in the New York Times, provided this update (on Twitter) about Facebook's cryptocurrency project:

And finally, one week ago, the Wall Street Journal reported that Facebook was "recruiting dozens of financial firms and online merchants to help launch a cryptocurrency-based payments system," and that the core part of this initiative (code-named "Project Libra") is "a digital coin that its users could send to each other and use to make purchases both on Facebook and across the internet." Furthermore, this report said that, according to people familiar, Facebook was talking to "financial institutions including Visa Inc., Mastercard Inc. and payment processor First Data Corp." about investing in this project.

Facebook's Latest Thinking on Crypto Ads

On Wednesday (May 8), Facebook announced that since June 2018 it has been listening to "feedback", and that while those wishing to run ads that promote cryptocurrencies still need pre-approval, it was no longer demanding "pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency." It also said that it will "continue to ban ads for initial coin offerings (ICOs) as well as ads for binary options."

Featured Image Credit: Photo via Pexels.com

Lower-Tier Crypto Exchanges Dominate According to New CryptoCompare Exchange Review

Cryptocurrency exchanges of a lower-tier – including those with not-so-solid order books – currently dominate the cryptocurrency space when it comes to trading volumes.

This, according to the CryptoCompare August 2019 Exchange Review, which found that cryptocurrency exchanges rated D-E according to the firm’s Exchange Benchmark represent 71.1% ($473 billion) of the market's trading volume combined.

Overall, during the month of August, CryptoCompare found that crypto-to-crypto trades dropped by nearly 20%, while the trading volume from cryptocurrency exchanges that offer trading pairs with fiat currencies dropped by nearly 15%.

LBank, a D-rated cryptocurrency exchange that last month in terms of trade sizes, seeing an average trade size “roughly fourteen times that of AA-rated Coinbase,” and registered an average of 11,000 trades a day, compared to Coinbase’s 68,000 a day average.

The report further digs into the daily unique visitors top cryptocurrency exchanges saw, as well as volumes seen by top trans-fee mining and decentralized exchanges and cryptocurrency derivatives products. CryptoCompare’s CEO, Charles Hayter said:

Our August Exchange Review examines the major changes last month to the crypto exchange landscape. Highlights in this edition include a revealing spotlight on stablecoins as well as an analysis of trade volumes against daily web traffic.

Notably, the document highlights Bitmax, a trans-fee mining exchange with a ‘D’ rating, “constituted roughly half of all USDT volume” thanks to its USDC/USDT and PAX/USDT trading pairs. Its large USDT volumes from these pairs, it reads, “dropped off abruptly at the beginning of September.”

Featured image via Unsplash.com.