Facebook has historically had a complicated relationship with cryptocurrency advertising. The platform has flipped back and forth several times on its policies around allowing crypto ads, ranging from an outright ban to proposing potential regulations. As of October 2022, here are the latest guidelines for advertising cryptocurrency and related products on Facebook.
The initial crypto ad ban
In January 2018, Facebook announced that it would ban all advertisements promoting cryptocurrencies like Bitcoin and initial coin offerings. They cited the frequent scams and deception in the crypto space as the reason for this blanket ban.
At the time, Facebook’s product management director Rob Leathern said in a blog post: “We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception. That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”
This initial ban was part of Facebook’s efforts to crack down on misleading and deceptive promotions across the platform. However, the sweeping prohibition on crypto ads caught some legitimate companies by surprise.
The partial reversal
In June 2018, Facebook partially reversed the blanket ban – they announced they would allow some crypto ads, but only from pre-approved advertisers. Companies could apply for pre-approval if they were a registered and accredited business in good standing.
In order to be considered, advertisers had to submit an application to help Facebook assess their legitimacy. Factors like licenses held by the business, whether it was traded on a public stock exchange, and other background checks were part of the process.
This move opened the door for above-board crypto firms to reach Facebook’s billions of users through promoted posts. However, the pre-approval requirement meant smaller startups still didn’t have access to those users for customer acquisition.
The 2018 FCC crackdown
Shortly after Facebook relaxed the rules for some advertisers in June 2018, the tide shifted again. In December of 2018, the social media platform banned promotional posts marketing cryptocurrency once more.
This time, the catalyst was an order from the Federal Trade Commission (FTC) cracking down on deceptive crypto promotions. The directive from the FTC classified cryptocurrency as a speculative high-risk financial instrument.
As a result, Facebook and other platforms were compelled to restrict any ads that could lead to uninformed purchases of speculative investments. Since most crypto ads at the time focused on get-rich-quick schemes around Bitcoin and other coins, Facebook erred on the side of caution and banned them entirely.
The fallout
The 2018-2019 prohibition on crypto ads frustrated many in the blockchain industry. They felt it unfairly punished legitimate and responsible crypto businesses along with the scams and hype-driven promoters.
Guy Hirsch, the U.S. managing director of trading platform eToro, summed it up: ???Despite the commendable intentions behind the Facebook ban, the net effect is that law-abiding companies in the crypto sector are unfairly punished and prevented from sharing their services with audiences that may benefit from them.???
Meanwhile, critics and consumer advocacy groups like Consumer Reports argued the ban didn’t go far enough. They urged Facebook to be more proactive in protecting users from cryptocurrency fraud and misleading claims beyond just advertising.
The selective reversal
Starting in May 2019, Facebook quietly eased the restrictions and began allowing some crypto firms to promote on the platform again. Companies like exchanges and wallet providers could now buy ads.
However, the updated policy continued blocking promotions for initial coin offerings. And Facebook maintained the requirement for pre-approval – advertisers had to go through an application process proving they were an established and legitimate business before gaining permission to advertise.
This selective reversal gave compliant and regulation-abiding companies the green light once more. But questionable players and smaller startups still couldn’t access Facebook’s powerful advertising audience.
Recent developments
In 2020 and 2021, Facebook took more steps toward opening up to cryptocurrency providers:
- In May 2020, the platform allowed exchanges and trading platforms like Coinbase to start promoting crypto giveaways and raffles.
- In June 2021, Facebook adjusted their regulated financial products policy to no longer require pre-approval for ads promoting cryptocurrency and blockchain technology – as long as the advertisers met eligibility standards showing they were authorized and licensed.
These policy tweaks continued the path of relaxing restrictions for above-board crypto companies. But Facebook still kept bans in place for deceptive business models like binary options and initial coin offerings.
Current state of crypto advertising on Facebook (October 2022)
Here are the most recent guidelines as of October 2022 for running cryptocurrency ads on Facebook’s platforms:
| Allowed | Not Allowed |
|---|---|
| Advertising cryptocurrency products and services | Promoting initial coin offerings |
| Promoting cryptocurrency exchanges and trading platforms | Promoting unregulated or speculative financial products (e.g. binary options) |
| Promoting educational content around cryptography, blockchain technology, etc. | Promoting get-rich-quick schemes or guaranteed high investment returns |
| Advertising related products like crypto wallets, analytics services, etc. | Promoting celebrity cryptocurrency endorsements |
However, all potential cryptocurrency advertisers must still comply with Facebook’s eligibility requirements showing they are an authorized provider. Advertisers must submit an application with details about licenses held, governance structure, and other documentation that proves legitimacy andauthorization to promote financial products and services.
Factors still limiting crypto ads
While the above policies allow most mainstream cryptocurrency companies to advertise, there are still some limiting factors:
- Small startups may not meet eligibility requirements around licenses and operating history.
- ICOs remain prohibited from promoting their offerings.
- Fraudulent actors can potentially slip through if they manufacture convincing fraudulent eligibility documentation.
- No clear definition or restrictions around advertising NFT projects (a gray area).
Why Facebook continues tightening crypto promotions
Facebook maintains more stringent standards for crypto advertising compared to other industries for a few reasons:
- Cryptocurrencies are still considered high-risk, volatile investments.
- Lack of full regulatory clarity around cryptos.
- High incidence of crypto advertising fraud historically.
- Vulnerability of Facebook’s user base to misleading claims around money-making.
Critics argue these rationales are somewhat outdated given crypto’s growth and maturation. However, Facebook has millions of users with limited financial/technological literacy who are susceptible to crypto hype and scams. The platform is trying to balance enabling legitimate crypto firms to reach that audience while maintaining consumer protections.
Oversight challenges
Facebook has also historically struggled to consistently enforce its complex crypto advertising policies:
- Policy interpretations across different reviewers may be inconsistent, leading to vague rejections.
- Policy violations can be missed during ad review process.
- Ad reviews focus on initial approval, with less ongoing monitoring after launch.
- Unclear delineation around related products like NFTs.
These oversight challenges mean Facebook will likely continue taking a cautious approach, even as they open up further to regulated crypto companies. More rollout of automated ad screening technologies could help address inconsistencies and gaps in policy enforcement.
The path forward
Facebook will likely continue expanding crypto advertising access incrementally based on regulatory developments and industry self-regulation efforts. Some possibilities for the future evolution of their crypto ad policies include:
- Adding transparency requirements around crypto ad disclosures and disclaimers.
- Loosening restrictions for regulated crypto derivatives like futures and options.
- Developing specialized NFT promotion policies separate from broader crypto rules.
- Partnering with accredited crypto business associations to streamline eligibility applications.
- Expanding eligibility to regulated decentralized finance (DeFi) activities like staking and lending.
However, Facebook will tread carefully to avoid opening the floodgates to a repeat of past issues with misleading and fraudulent promotions in the crypto space.
Conclusion
Facebook’s approach to cryptocurrency advertising has followed a winding road, but current policy stands at:
- Most legitimate crypto companies can promote products and services with proper authorization.
- Fraud-prone practices like ICOs and binary options remain banned.
- Strong focus on eligibility requirements to confirm advertiser legitimacy.
- Policies continue evolving based on regulatory guidance and crypto industry maturation.
With thoughtful precautions, Facebook can enable consumers to learn about new cryptocurrency innovations and investments, while also protecting them from risks. Clear communication and thoughtful enforcement of policies will be critical going forward.