Twitter has been toying with cryptocurrency for the last few weeks. First, rumours emerged that it would be following Facebook and Google in placing a ban on crypto advertising. Then, cryptocurrencies received a glowing recommendation from Twitter’s CEO, Jack Dorsey, who said Bitcoin will be the world’s – and Internet’s – single future currency.
However the toying came to an end with a snap as Twitter announced that it would indeed be putting up a rather large ban on cryptocurrency advertising. This is in line with Facebook and Google, who did the same previously for similar reasons too.
Twitter has said the prohibition will cover advertising of Initial Coin Offerings (ICOs), as well as token sales. This can be considered an attempt to stamp out fraudulent, deceptive and dodgy ICO scams which are currently rife in the market.
However, the ban goes further and bans ads by cryptocurrency exchanges and cryptocurrency wallet services, unless they are public companies listed on certain major stock markets.
It feels like an extra step by Twitter that is too harsh on the crypto community as a whole. There are even some that feel it is hypocritical from a platform that is full of other scams.
For the safety of users
Much like Facebook, which stated its banning policy would be “intentionally broad” to begin with, Twitter is taking aim at many business sectors within the cryptocurrency market place: ICOs, exchanges and wallet services are all in their crosshairs.
Just like Google, Twitter’s reasoning for the ban is the protection of its audience from deceptive content.
Google’s director of sustainable ads Scott Spencer said in a blog post that set out to explain the reasoning for the ad ban, after it was announced:
“As consumer trends evolve, as our methods to protect the open web get better, so do online scams. Improving the ads experience across the web, whether that's removing harmful ads or intrusive ads, will continue to be a top priority for us.”
Twitter was already taking measures to prevent crypto-related accounts from “engaging with others in a deceptive manner”, but faced calls to enact futher measures following bans from Facebook Inc. and Alphabet Inc. (Google’s parent company).
A broad blanket
The idea of curtailing scam ICOs from reaching a susceptible market should well be praised, and could be the right way to go about controlling the spread of deceptive crypto companies. However, as Zennon Kapron, director of the financial consultancy Kapronasia pointed out, it is not that simple:
“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.”
“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 problem comes with Twitter taking a broad approach to all cryptocurrency advertising, banning wallets and exchanges too, unless they are listed on certain major stock markets.
There are not many services, legitimate or otherwise, that are listed on stock markets, which makes this blanket ban all the more damaging, but also helps explain its base. As Twitter cannot moderate and determine the validity of all exchanges and wallets, the ban that is has decided to issue has to be an overarching one.
Seeing some good, some seeing stupidity
With such a bold and broad attack on the burgeoning cryptocurrency space, reactions have been mixed. There are those who feel that scams in the market having an avenue to reach more susceptible people is dangerous.
But there are also those who think Twitter’s overreaching ban is stifling all the good out there that needs to be supported, and requires advertising to receive that support.
Ronnie Moas, who has become prevalent in the cryptocurrency community, sees the ban as positive because it will “cause a flight to quality.”
Kurt Wagner, frome Recode, pointed out something quite interesting in the Twitter ban that seems to benefit its CEO, Jack Dorsey, as well as his other crypto companies.
Daniel Duarte, CTO of Auctus, a Blockchain company that probably falls under the gambit of this ban, sees the merit in it but also hopes for a chance for good projects to live on these platforms.
“As the crypto community continues to grow on Twitter, and the likes, so do the pervasive scams that seek to take advantage of people interested in the space. “It’s not surprising that Twitter has done this and hopefully, the decision of major channels to ban advertisements will help stifle bad actors so that in the future, ads for good projects can live across these platforms.”
Andy Bromberg, CoinList CEO, echoes these sentiments, also pointing out how hard it is in such a big space to separate the good from the bad, but he also believes that steps should be taken to educate these types of companies on how to tell legitimate endeavours from scams.
“There is a tremendous number of low-quality projects in the cryptocurrency space - frauds, scams, and poorly thought-out concepts. This early in the industry, most businesses simply don't have the resources and expertise to properly evaluate such token companies and separate the wheat from the chaff."
“In some cases, it may make sense for these businesses to take a step back from the industry and build their knowledge.”
However, not everyone feels that it is a good ploy form Twitter. The micro-blogging site is not exactly squeaky clean, and for it to take such a broad swipe at cryptocurrencies, while letting other scams go unchecked is something that frustrates Trey Ditto, CEO of Ditto.
“Twitter and Facebook have bigger problems – like selling our data, altering elections and allowing hate to spread through bots and fake profiles. It’s hard not to laugh when a company like Twitter - that promotes millions of fake profiles and allows people to buy fake followers and likes - all of a sudden has a moral compass in the crypto space.”
“I’m curious to see where the line in the sand is actually drawn by Twitter and other social media platforms. In the crypto community, there is a small handful of bad players – just like there are in any industry – and they should be dealt with accordingly. I don’t think that means we should ban every company that’s utilizing social media to educate potential investors.”
Peer pressure
There is almost direct evidence that Twitter fell to the peer pressure from the likes of Facebook and Google with these large blanket bans, but it could of course be a sign of something greater brewing.
Government regulators have stepped up their own game in warning people about the dangers of the cryptocurrency space with the mainstream adoption spilling out into everyday life.
Adverts for cryptocurrency have sprouted up everywhere, from London’s transport network to Japanese television. Movie and sports stars have thrown their names behind them as their popularity grows.
However, that popularity only feeds a frenzy, which is easy to take advantage of for scam businesses operating in the cryptocurrency space. There needs to be a balance struck between stifling innovation with the banning of its marketing, and allowing scams to run riot.
The banning of crypto advertising seems to be a symptomatic response to cure an ailment in the most broad and managing way possible. Google, Facebook and now Twitter have taken a blanket approach which wipes out not only the bad, but a lot of the good.
For these companies to take such a bold stance against illegal and scam cryptocurrency related businesses means they are serious about not letting them spread. However, if they are that serious, their approach should be a lot more clinical and focused. It should allow legitimate businesses to thrive and grow through their platform advertising.