A US regulator is also reportedly scrutinizing one of the world’s biggest cryptocurrency exchanges, Bitfinex.
Facebook is throwing cold water on the cryptocurrency craze by banning ads that promote virtual currencies and initial coin offerings. So say farewell to ads that encourage you to “Use your retirement funds to buy Bitcoin!” or “Click here to learn more about our no-risk cryptocurrency.”
The policy change also goes after ads promoting binary options, which involve making all-or-nothing risky financial bets. “There are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith,” Facebook said in a blog post.
For now, the new policy is intentionally broad. Facebook plans to crack down on these ads across its services, including Instagram, but will revisit the ad policy in the future.
Facebook’s decision follows growing action to rein in the cryptocurrency market. Bloomberg today, for example, reported that the US Commodity Futures Trading Commission is scrutinizing one of the largest digital currency exchanges, Bitfinex.
Last month, the commission reportedly sent subpoenas to Bitfinex and Tether, a company that develops its own coin, which critics say has been used to artificially drive up the price of Bitcoin. In response, Tether said in an email: “We routinely receive legal process from law enforcement agents and regulators conducting investigations. It is our policy not to comment on any such requests.”
The regulatory action doesn’t bode well for the short-term future of many cryptocurrencies. On Tuesday, the price of a bitcoin briefly fell below $10,000.
South Korea has also begun enforcing rules that demand cryptocurrency trades occur through bank accounts registered under the person’s real name. The measure have been adopted to prevent crimes like money laundering and tax evasion.