Meta, the parent company of social media giants Facebook and Instagram, has recently updated its eligibility criteria for running crypto ads, adding a total of 24 more regulatory licenses to its list of accepted licenses.
While the move marks progress in Facebook’s long-standing policy that barred crypto firms from running ads on its services, the company is still far away from retreating from its crypto ad ban.
Prior to this update, the company required crypto firms to submit an application detailing whether they are traded on a public stock exchange and what licenses they hold. Now, it only focuses on relevant crypto licenses.
“We’re doing this because the cryptocurrency landscape has continued to mature and stabilize in recent years and has seen more government regulations that are setting clearer rules for their industry,” Facebook said.
However, there are very few crypto businesses that hold the eligible licenses.
For instance, in the US, crypto platforms that tend to run ads on Facebook should either have a Money Services Business (MSB) registration license from Financial Crimes Enforcement Network (FinCEN) or a BitLicense from the New York State Department of Financial Services (NYSDFS).
To put this into perspective, a limited number of crypto companies like Coinbase, Circle, and Robinhood Crypto are actually eligible to run ads. On the other hand, the majority of crypto firms, including exchanges like Binance.US and FTX.US that don’t have the accepted licenses, won’t be able to run ads on Facebook.
Mentioning this, Ouriel Ohayon, CEO and co-founder at the mobile crypto wallet ZenGo, argued that only “2% of all crypto related services” will be eligible.
“Twitter. Facebook. Tiktok all have a clear ban on crypto ads,” Ohayon said, adding that this is “a vector attack to the industry as onky custodial centralized services have a chance to tell what crypto *is*.”
Ohayon also stated that media outlets did not report the news very accurately.
Ads from those advertising things like crypto events “continue to be exempted from having to seek pre-approval,” Bloomberg noted, adding that the previously approved advertisers will not be impacted by the change.
In late October, Facebook changed its corporate name to ‘Meta’, a move meant to reflect the company’s serious intentions in building the metaverse. The platform has also dedicated a USD 50m fund to “responsibly” develop the metaverse.