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31 Jan, 2018 00:50

Bitcoin prices plummet as Facebook bans cryptocurrency ads

In a bid to stop misleading or deceptive ads, Facebook is banning all advertisers from promoting cryptocurrencies, including bitcoin. The price of all major cryptocurrencies plunged following the news.

Facebook announced its new policy Tuesday. It prohibits any advertisements related to cryptocurrencies, binary options or initial coin offerings (ICO) from appearing on the world’s largest social media platform.

Rob Leathern, the company’s product management director, said the ads were a problem for users because they are “frequently associated with misleading or deceptive promotional practices.”

“We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception,” Leathern said. “That said, there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”

Leathern said the policy was designed to be “intentionally broad” while the company “works to detect deceptive and misleading advertising practices.” The policy will be enforced on Facebook, Instagram and Audience Network, an ad network that extends Facebook campaigns to third-party apps. Facebook said they will revisit its decision and how they enforce it once their “signals improve.”

“This policy is part of an ongoing effort to improve the integrity and security of our ads, and to make it harder for scammers to profit from a presence on Facebook,” Leathern said.

Adverts for cryptocurrency-related investments have surged as bitcoin prices skyrocketed. With an average two billion monthly users, Facebook has been one of the sector’s largest markets.

After the announcement, bitcoin’s price tumbled by more than 10 percent Tuesday, slipping below $10,000 for the first time in over two months.

Many other cryptocurrencies also took a hit Tuesday. According to Cryptocurrency Market Capitalizations, the price of the top 50 major cryptocurrencies dropped, with each of the top 10 losing between seven and 15 percent of their value.

The announcement follows a Bloomberg report that the Commodity Futures Trading Commission (CFTC) sent subpoenas to cryptocurrency exchange Bitfinex and Tether last month.

Tether mints coins they claim are pegged one-to-one to US dollars held in reserve. However, according to unnamed sources, the company has never provided any evidence of its nearly $2.3 billion in total assets to the public nor have its accounts been audited. Some are skeptical that the money is even there.

Tether and Bitfinex both share the same top five executives, including chief executive and chief financial officer, according to their  websites.

The announcement comes on the heels of the Japanese government’s announcement last week that it had suspended trading and withdrawals at the cryptocurrency exchange Coincheck. The move came after hackers stole some 500 million NEM tokens worth around $532 million, the biggest ever theft from a cryptocurrency exchange.