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Google bans cryptocurrency ads

Reuters, LONDON

The world’s first blockchain monument, which underpins cryptocurrencies, is pictured in the city center of Kranj, Slovenia, on Wednesday.

Photo: AFP

Alphabet Inc’s Google on Wednesday said that it was banning advertisements for cryptocurrencies and initial coin offerings, the latest Internet company to clamp down on the sector amid growing concerns about scams.

Google’s action, which takes effect in June and follows a similar move by Facebook Inc earlier this year, sent the price of the best-known cryptocurrency, bitcoin, down more than 10 percent to its lowest in a month.

Interest in cryptocurrencies has surged in the past year as their prices rocketed. That growth has spawned online advertising used by hundreds of companies trying to raise funds by launching new coins or encouraging people to trade the virtual currencies.

“Improving the ads experience across the Web, whether that’s removing harmful ads or intrusive ads, will continue to be a top priority for us,” Scott Spencer, director of sustainable ads at Google, said on the company’s official blog, The Keyword.

Under the new policy, Google said it would ban ads for cryptocurrencies and related content, such as initial coin offerings, cryptoexchanges and cryptocurrency wallets and advertisements providing trading advice.

In January, Facebook said it would ban ads promoting financial products and services tied to cryptocurrencies and initial coin offerings because of the risks to users.

Regulators across the globe have warned consumers about the risks of investing in cryptomarkets, but Internet companies are introducing outright bans because they worry there is not sufficient protection for consumers.

“If an entity such as Google does not feel comfortable with exposure to these cryptocurrencies, then it is right that they don’t promote it,” said Chris Keshian, chief executive of $APEX Token Fund, which invests in cryptocurrency fund managers.

Zeeshan Feroz, CEO of the UK arm of Coinbase, one of the largest bitcoin exchanges, said Google’s decision was a positive development that would not dampen demand, although he viewed the ban as too widespread.

“The Google ban is perhaps too broad as it is. It should be narrowed down” to companies that pitch cryptocurrencies as investments promising a return, Feroz said.

The price of bitcoin traded on the Luxembourg-based Bitstamp exchange fell almost 10 percent to US$8,201, the lowest since Feb. 12. It was last down 8.7 percent at US$8,337.51

Other large cryptocurrencies also fell on Wednesday.

Bitcoin has lost about 40 percent of its value this year after rocketing more than 1,300 percent last year.

Google also said it would stop ads for financial products like binary options and synonymous products, contracts for difference, rolling spot forex and financial spread betting.

Companies wanting to promote those products would need to be registered with the relevant financial regulators before they could advertise again.

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