Twitter yesterday started banning all crypto-currency advertising in a bid to head off rising levels of fraud permeating the burgeoning industry.
A statement from the micro-blogging giant had the following:
“We have added a new policy for Twitter Ads relating to a cryptocurrency. Under this new policy, the advertisement of Initial Coin Offerings (ICOs) and token sales will be prohibited globally.”
According to reports, the ban will also stretch to ads from crypto-currency exchanges and wallet services, unless they come from publicly listed companies.
The decision by Twitter follows similar moves by Facebook and Google and follows rising levels of fraud and cyber-risk as investors rush to cash in on the crypto-currency digital gold rush.
One industry expert welcomed the news. Alexey Burdyko, CEO of blockchain company Play2Live, claimed the long-term impact should benefit the nascent crypto-currency industry by protecting its user base.
“One of the goals of dropping the ads is to protect investors from fraudulent, scam projects looking to take advantage of investors. These scammers are damaging trust in new token sales – so should this goal be achieved, trust will be rebuilt over time, and future crypto-launches will reap the rewards,” he told Infosecurity.
“The presence of scams in this space is beyond any doubt – they are out there, and they are finding ways of parting people from their money.”
An Ernst & Young report from January claimed that 10% of all ICO funds are stolen by hackers or fraudsters, amounting to almost $400m in losses thus far.
Phishing is particularly popular, with attackers scooping up to $1.5m per month by either tricking the recipient into making a fund transfer or handing over the private keys to their digital wallets.
Burdyko added that investors and ambitious start-ups will find a way around the social ads ban.
“The impact of the ban on crypto ads across social media may affect the level of engagement that new token-sale campaigns are receiving, as large-scale awareness will be harder to achieve,” he said.
“However, there are alternative means of promoting such projects, and those potential investors that are serious about backing new crypto-currencies will research and seek out the best new campaigns regardless of social media advertising.”