When Facebookfor bitcoin and other cryptocurrencies from the social media site, it was heeding the call of a man who has made it his business to sound the alarm.
Gavin Sheridan, CEO of legal startup Vizlegal and a persistent critic of ads luring people to invest in the emerging -- but highly risky -- crypto sector, waged a persistent Twitter campaign urging Facebook to change its policy.
"Overall, the potential for people being scammed is enormous -- and my issue was that Facebook was facilitating this possibility by accepting the ads in the first place, and indeed by receiving money to display the ads," said Sheridan, who began noticing the ads on social media, especially on Facebook, about a year ago.
Sheridan may have saved some punters more than a few bucks. The price of bitcoin, a nearly 60 percent drop in value from its record of more than $19,000 in December. Other cryptocurrencies also swooned amid growing concerns that regulators in the U.S. and abroad are clamping down on the asset class.
In tracking some of the ads, Sheridan found himself being shuttled to websites designed to look like a news organization, such as a "fake CNN," which then led to "time limited" offers of "once-in-a -lifetime" opportunities, he relayed in an email.
"This policy is in response to the many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith, and is part of an ongoing effort to improve the integrity and security of our ads," a Facebook spokesperson emailed when asked how much Sheridan's concerns had to do with its action.
Sheridan applauded Facebook for striking the ads from its platform. He also praised Rob Leathern, product management director at Facebook, for being "both honest and receptive" in engaging which Sheridan on Twitter in the weeks immediately preceding the ad ban.
In a blog post Tuesday, Leathern, called the new rules "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."
While he's glad Facebook is stemming the tide against dodgy ads, Sheridan acknowledges the battle is likely to continue as long as cryptocurrencies remain hot and credulous investors are willing to plunk their money down.
"Facebook made a good first move, but it remains to be seen how serious the company is about its ban," he said. "We only have Facebook's word on anything they say or implement, and are left in the dark about what their overall objectives are and how they execute them.
"Part of the problem, as Facebook no doubt knows, is this can become a game of whack-a-mole," Sheridan added. "The advertisers in question will likely change their strategy in response to this announcement. This puts the focus back on how Facebook accepts and reviews ads in the first place."
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