Alphabet Inc. subsidiary Google (GOOGL) plans to ban advertising related to cryptocurrency products from its online platforms, starting June. The Mountain View, California, company made the announcement in a blog post published yesterday. Cryptocurrency markets fell by as much as 7% in response to the news.
In its post, Google stated that it had updated its Financial services policy to disallow ads for cryptocurrencies and related content. According to the company, this includes the likes of initial coin offerings, crypto exchanges, cryptocurrency wallets and cryptocurrency trading advice.
Facebook Inc. (FB) had announced a similar ban on advertisements for cryptocurrency-related products earlier this year. (See also: Facebook Bans Ads For Cryptocurrencies And ICOs).
“We don't have a crystal ball to know where the future is going to go with cryptocurrencies, but we've seen enough consumer harm or potential for consumer harm that it's an area that we want to approach with extreme caution,” Scott Spencer, Google’s director of sustainable ads, told CNBC.
Two-Pronged Impact on Crypto Market
Google’s decision to clamp down on advertising related to cryptocurrency products should have a dual effect on their ecosystems. First, it will close off another avenue for dubious actors and scammers, whose association has earned the ecosystem a questionable reputation.
Second, it may also provide a bump to existing businesses, such as cryptocurrency exchanges, which have complied with government regulation and earned a positive reputation. Such businesses should not be effected by Google’s decision and will attract more customers intrigued and interested in learning more about cryptocurrencies. (See also: Blockchain Is A Game Changer For Online Advertising.)
The effect of this decision to Google’s bottom line is not clear. But a WSJ report on the topic quotes an earlier Google statement, where it claimed to have removed 130 million ads by hackers who were using them to mine for cryptocurrencies. “That is a small percentage of the ads run on Google’s ad network,” the publication wrote.
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