Google has announced that it will ban all cryptocurrency-related advertising. The ban includes ads for digital wallets, initial coin offerings, trading advice and cryptocurrency exchanges.
The ban follows a similar move by Facebook in January.
Google said it had updated its financial services ad policy and the changes would take effect in June.
Google director of sustainable ads, Scott Spencer, says the ban will mean that even companies with legitimate cryptocurrency offerings won’t be allowed to use any of Google’s products to publish their ads. This includes Google services that place ads on third party sites.
Scott told the CNBC news service: “We don’t have a crystal ball to know where the future is going with cryptocurrencies but we’ve seen enough consumer harm or potential for consumer harm to recognise that its an area that we want to approach with extreme caution.”
Cryptocurrencies operate in largely unregulated markets, which increases consumer risks. Some regulators are concerned that the increased retail investor interest in cryptocurrenies is encouraging scammers to use cryptocurrency ads to promote fake schemes.
Even without the involvement of fraudsters, dealing in cryptocurrencies is highly risky. Analysis by newsBitcoin.com found that 59 per cent of ICOs launched in 2017 have failed or are likely to fail.
CNBC reports that Bitcoin lost 12 per cent of its value when Facebook moved to ban cryptocurrency ads and that immediately after Google’s announcement its value fell from US$9000 to US$8252 – its lowest value in a month.
Other cryptocurrencies have also taken a hit. Ethereum is down around 9.5 per cent since the announcement and Litcoin is down 6.5 per cent.
Google also announced restrictions on ads for two high risk-investment strategies, binary options and contracts for difference. It said advertisers offering these products would need to be licensed by regulators in any country where they want t advertise and also be certified by Google.