On Tuesday, Facebook announced it will begin banning all advertisements promoting cryptocurrency, including bitcoin and initial coin offerings. This “intentionally broad” ban is an effort to halt advertisers that the social network claims “are not currently operating in good faith.”
Kyle Forkey, a cryptocurrency startup advisor and founder of a blockchain consulting group Ethmint, tells Inverse that Facebook’s decision is the good step toward stabilizing the cryptocurrency sector, which has been plagued by volatility and scams recently.
“It will be beneficial to the average investor and indirectly beneficial to crypto as a whole,” Forkey tells Inverse. “The more we flush out these scammers, the better the ecosystem is going to handle it, so I’m all for it.”
He goes on to explain that people who are compelled to invest in cryptocurrency businesses based off a Facebook ad might be setting themselves up to lose money. The ban of these ads would keep people from receiving potentially disingenuous messages that they can get rich quickly and force people to do a little more research before they invest.
Forkey also believes that legitimate cryptocurrency companies will not be hurt by this new Facebook regulation.
“A majority of the money raised by legitimate ICOs is through partnerships and relationships,” he explained. “For my offering for example, we had raised almost 95 percent of our funds by going out and talking to people and very little through direct advertising like Facebook. I think the only companies that are going to take a hit from losing Facebook advertising are going to be the people not actually putting themselves out there.”
While we can’t be sure exactly how this will impact the cryptocurrency sector, crypto-enthusiasts on Twitter echoed Forkey’s comments.
This might be a good first step in calming the crypto-craze that has caused so many people to irresponsibly invest.