Twitter will ban advertisements for several kinds of cryptocurrency products and projects. The policy, according to Sky News, would go into effect in two weeks and would block ads for initial coin offerings, token sales, and cryptocurrency wallets. It could also encompass a ban on ads for cryptocurrency exchanges.
Fortune has reached out to Twitter for confirmation of Sky’s report. But earlier this month, Twitter CEO Jack Dorsey wrote that the company was “on it” when cryptocurrency watcher Emin Gün Sirer highlighted the prevalence of cryptocurrency “scams” on the site.
These scams are getting out of hand. @jack, @twitter, if you can’t detect this kind of brazen scam, what hope do you have of improving your platform? https://t.co/7PTkbuaUhy
— Emin Gün Sirer (@el33th4xor) March 6, 2018
Sirer’s comment was primarily in reference to fake bot accounts, but Twitter has also become nearly the last bastion for broad advertisements of cryptocurrency sales and projects. Both Facebook and Google have imposed similar bans, as it has become increasingly clear that U.S. financial regulators such as the CFTC and SEC regard many cryptocurrencies as investment offerings. Regulators closely monitor the marketing of investments, suggesting potential headaches for digital advertisers. Platforms such as Google and Facebook use primarily automated systems to screen ads, making it more difficult to prevent misrepresentation.
And it has become increasingly clear that, in the wake of 2017’s surge of interest in crypto-assets such as Bitcoin, new cryptocurrencies are often scams. Nearly half of 2017’s ICOs — sales in many ways similar to initial stock sales in startups — collapsed within months, with many supposed founders simply disappearing with the money they raised.
Other, slightly more elaborate offerings appear to have been Madoff-like Ponzi schemes. One of these, BitConnect, promised investors a laughable 40% monthly return, then collapsed dramatically in January. Social media, including both Twitter and Google’s YouTube video platform, have been major channels for peddling such projects. However, the impact of advertising restrictions alone will likely be limited — much of the deceptive and dangerous hype around cryptocurrency projects comes from individual ambassadors or early investors, or from “pump and dump” accounts who collectively manipulate the highly volatile market.