Cryptocurrency Regulation

Google to reverse ad ban on cryptocurrency

September 25, 2018


Google to reverse ad ban on cryptocurrency

On September 25th, Google announced a dramatic change to its cryptocurrency advertising policy, stating that starting this October, Google will begin allowing regulated crypto exchanges in the United States and Japan to resume marketing on Google’s platform. Google’s change in policy represents a dramatic break from its existing policy, which was a blanket ban on all crypto advertising through Google’s advertising portal.

In March of 2018, Google had announced their ban on crypto advertising, with the goal of protecting consumers from unscrupulous ICO sales and a blatant frauds and scams. In addition to Google’s ban on crypto advertising through its primary search platform, Google had banned mining extensions from running through Google Chrome and crypto mining applications through Google’s Play store.

Google’s announcement specified that in order for regulated exchanges to advertise via Google’s platform, the exchanges will first need to be certified as regulated in the jurisdictions they are hoping to advertise. This limits the potential pool of advertisers to a select group. Google did not lay out any additional details about the certification process, beyond noting that advertisers would have to be regulated in the jurisdiction they wish to advertise.

Google’s update was relatively terse, stating:

“Advertisers will need to be certified with Google for the specific country in which their ads will serve. Advertisers will be able to apply for certification once the policy launches in October.”

Google will presumably offer greater clarity on the process once the certification period is opened for exchanges in October.

Brokers regulated in Japan operate under the Payment Services Act, while US brokers still face a patchwork of state regulation with no clear guidance and rules from national regulators such as the SEC or CFTC. Google would presumably use the New York BitLicense as a benchmark, given New York City’s prominent role in digital asset markets.

Confusion over which brokers will be accepted in the United States is another illustration of how the lack of a unified national regulatory environment in the US is slowly the continued growth of the crypto industry.

Google’s volte-face highlights the struggle tech giants have faced in their response to the continuing expansion of the crypto industry. Google’s original blanket ban on cryptocurrency advertising took place alongside a series of similar bans from social media companies such as Facebook and Twitter.

The cascade of advertising bans that were announced during the beginning of 2018 helped fuel the dramatic price collapse of the cryptocurrency market. The ban on crypto advertising by American tech giants was matched by similar bans from their Chinese competitors, which further squeezed the market.

The change in Google’s policy mirrors a recent change in Facebook’s policy. Facebook’s relaxation allowed for cryptocurrency firms to advertise via Facebook’s platform only after they had received prior approval from Facebook. Facebook’s new policy was announced in June. Areas of the cryptocurrency that are particularly prone to fraud and scams, such as ICOs, remain categorically blocked by Facebook’s policy, as they will be under Google’s new policy. Facebook’s policy still leaves the firm with a tremendous discretion when vetting advertisements.

While Google gave no indication of what caused the policy shift, Facebook’s policy relaxation may have forced the search giant’s hand. Given Google and Facebook command most of the online advertising spend, Google may have felt the need to match Facebook’s policy to retain advertiser loyalty.

Google’s original ban on crypto advertising caused a dramatic collapse in Bitcoin prices, sending BTC down roughly ten percent following the announcement. The announcement of Google’s new policy failed to move prices in a similar fashion, with Bitcoin pricing down slightly alongside the rest of the crypto market following the new policies announcement. Bitcoin’s price was down roughly four percent following the announcement.

Facebook and Google’s relaxation of their blanket bans on cryptocurrency advertising are another powerful indication of the growing acceptance of crypto by mainstream institutions. Given the prominent role America’s technology giants play in the global economy, changes to their policy will continue to play an important role in the crypto industry’s development.