A Canadian regulator wants Google to follow Facebook by banning cryptocurrency ads, as well as ads for ICOs and binary options.
If there’s one reflex you can automatically assume from a government entity when confronted with something new, it’s the instant urge to ban. It’s blatantly obvious that most governments are not fans of cryptocurrencies. While some are looking to enact some form of regulation, others are looking to more stringent means. A senior investigator with the Manitoba Securities Commission in Canada, Jason Roy, is asking Google to follow in Facebook’s steps and ban cryptocurrency ads, as well as advertising for ICOs and binary options.
When in Doubt, Ban!
Jason Roy is tickled pink with the decision by Facebook to ban ads for cryptocurrencies and ICOs. He notes that the FBI and Canada’s Binary Options Task Force lobbied Facebook hard to enact a ban. Roy gloats:
We’re very pleased with Facebook’s decision. My hope is that Google will enact a similar policy, where they specifically name products like binary options, ICOs and cryptocurrencies.
However, Google says that they already have a ban in place that they enforce against misleading ads and misrepresentation. Yet Roy and other regulators note that you can easily find ads from various crypto-related businesses when doing a Google search. It seems that in their eyes, any ad associated with cryptocurrency is preying upon the weak and ill-informed.
Crazy About Binary Options
A particular focus by Roy and other regulators is the presence of binary options, which are often called all-or-nothing options. It is true that this sector of the industry is plagued by frauds and crooks, and Israel and a number of other countries has banned them entirely. But it seems the authorities are lumping all of the cryptocurrency businesses together.
When Roy looks at cryptocurrency ads circulating on the internet, he sees an ominous pattern. He says:
You have the former binary options firms that have made the switch to offering cryptocurrencies, and it’s basically the binary options scam 2.0. Then you have fraudulent and unregistered ICOs that are targeting people. And then you have cryptocurrency Ponzi schemes or multi-level-marketing schemes.
Roy says that the explosion of the cryptocurrency market is confusing. He states:
I think everybody is trying to figure out what’s going on. There’s just been an explosion of different ICOs and new tokens and crazy offerings. You’re seeing ICOs that are raising large amounts of money and there’s nothing behind them in certain cases, but members of the public are so hyped they’re throwing money at them.
Google Making Bank
There is a financial motive for Google not to go all banhammer on cryptocurrency ads. A pay-per-click expert told the Times of Israel that Facebook only accounted for 15-20% of the paid-click advertising budgets by companies. The largest recipient of advertising from crypto companies is Google.
The “expert” says that scammers are willing to pay top dollar for ad clicks in order to stay on top of any searches. He notes that a legitimate company will spend up to a dollar or two per click, but scammers are quite happy to go up to a whopping $100. The reason for such an expenditure is that the average amount spent by someone suckered by the scammers is between $1,500 to $2,000. He notes:
That’s their strategy. If they have to pay $400 to Google to get five clicks and then one of them converts (makes an initial deposit), that’s a money-making venture.
Google denies that such a scheme will work. It is noteworthy that the regulators and “expert” don’t have a firm dollar amount on how much cryptocurrency advertising revenue the search giant takes in. It’s probably a pretty good amount but an overall tiny sliver of their overall money stream.
Overall, it seems that regulators see nothing but sinister shadows and vile villains when looking at the crypto world. It’ll be interesting to see how much pressure they try to put on Google. Personally, it would not be surprising to see Google capitulate to the regulators’ demands. They’ve agreed to self-censorship before with totalitarian countries.
Do you think the regulators are going overboard by wanting such a ban by Google? Will the search engine giant agree to such a thing? Let us know in the comments below.
Images courtesy of Pixabay, Pexels, and Bitcoinist archives.