Google Bans Cryptocurrency Related Advertising, SEC Probe Tightens

Google Bans all Cryptocurrency Related Advertising

During last week, Google was reported to be updating its policies related to financial-services ad to ban any advertisement about content relating to cryptocurrency, which includes wallets, initial coin offerings (ICOs), and trading advice. This would mean that even the firms which have genuine cryptocurrency offerings won’t be permitted to display ads via any of the ad products of Google, which show advertisement on its own websites and on the third-party websites. According to a post of the company, this update will come into effect in June 2018.

Google's New Restricted Financial Product Policy (June 2018)
Google’s New Restricted Financial Product Policy

Scott Spencer, director of the sustainable ads at Google said: “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,”.

Across the crypto space, the reaction of this news was quite immediate as see in the image below

Impact of Google's ban on Crypto advertising
Impact of Google’s ban on Crypto advertising

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This update by Google was the part of its latest release of annual “Trust and Safety” ads report. It was reported by Google that it took down about 3.2 billion ads which violated its policies in the year 2017, which almost double the ads it removed in 2016, which stood at 1.7 billion. It is critically important for the parent company of Google, Alphabet to convince its advertisers that its ecosystem is effective and safe as it makes about 84% of its total revenue from advertising.

Cryptocurrency Hedge Funds Become New Targets of SEC Probe

According to a report by Bloomberg, the primary regulator administrating the Wall Street is looking at the hedge funds in the cryptocurrency world. The report shows that the SEC is investigating the practices of hedge funds whose focus is on the cryptocurrency market. More than 220 crypto hedge funds have emerged since the cryptocurrencies rose to prominence over the past couple of years so as to capitalize on the new interest in the space. These funds track the initial coin offerings (ICOs), cryptocurrencies and various other ventures related to the blockchain. The SEC has an interest in protecting hedge fund clients as the hedge funds manage money for outside investors. In order to accomplish the same, the SEC intends to step in to make sure that the valuation of the holdings by these funds is done in an appropriate manner.

Crypto Funds Started Per Year (2011-2018)
Crypto Funds Started Per Year

The SEC in the ongoing review process has said to have sent requests for data from the hedge funds focusing on cryptocurrency. These requests are aimed to ask questions like compliance protocols, methods used to price digital investment, and security measures. In many cases, the regulatory scrutiny could be intense as a few funds have also received subpoenas from SEC’s Enforcement Division.

Some analysts are of the view that even though the SEC is still gathering information, this could result in a crackdown of sorts. The booming field of crypto hedge funds could change significantly id that does place as there are about 220 hedge funds who are managing more than $3.5 billion in combined assets. However, from the perspective of the SEC, the crackdown would assist in protecting the customers of these funds, who in an effort to capitalize on the trendy cryptocurrency space might be exposed to an unknown level of risk.

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ICOs allowed in Korea with New Regulations

According to sources familiar with the issue, the financial authorities of South Korea in order to advance block-chain based technologies for the domestic investors are preparing a plan to allow digital token-based fundraising rounds and initial coin offerings (ICOs).

South Korea's Financial Services Commission
South Korea’s Financial Services Commission

One of the sources stated that “The financial authorities have been talking to the country’s tax agency, justice ministry, and other relevant government offices about a plan to allow ICOs in Korea when certain conditions are met.”
If implemented, the plan would a major reversal as the government in September last year banned ICOs and claimed that cryptocurrencies were neither currency nor money or financial products.

{The crypto markets can swing quickly, as you can see by comparing our Feb news to today’s update.}

A source from the Financial Service Commission (FSC) who oversee the cryptocurrency trading policies stated that the top financial policy regulator of the country has yet to finalize whether to allow ICOs in Korea for domestic companies and investors. He said “There are many speculating about the possibility of allowing ICOs. The FSC has acknowledged a third-party view regarding the issue, but there’s nothing that we can say officially at the moment.”

SEC Regulations of Cryptocurrencies supported by Thai Financial Experts

Financial experts of Thailand have provided endorsement to the Securities and Exchange Commission (SEC) to regulate every kind of virtual fund-raising and digital assets when a royal decree is enacted to that effect. Chatikavanij, the former finance minister, in an interview, stated that “I agree with the Finance Ministry’s [view] of letting the SEC be the only organization governing digital assets because it already oversees securities and has a profound understanding of digital assets.”

He also said that the TFA has had discussions with the Thai Finance Ministry, SEX, and the Bank of Thailand, to highlight their view that so as to protect investor and reduce risk, the official rules and regulations for cryptocurrencies were essential in the country combined with appropriate supervision of every kind of virtual fund-raising methods and digital assets.

Since the ICOs could be a useful means to raise funds, especially for SMEs, the TFA chairman clarified that the rules were not focused to stifle or ban such activities. In addition, in order to reduce risks, there is a need to educate the market participants. In the meantime, Veerathai Santiprabhob, governor of Bank of Thailand confirmed that within a month, the regulatory laws for digital currencies are expected to be finalized and will encompass of arenas like protecting the investors and possibility of using cryptocurrency for criminal activities like money laundering and tax evasion.

3 Crypto Exchanges Raided in Embezzlement Probe

After a government investigation January, which revealed that a portion of the customers’ asset was transferred to a private bank which belonged to top managers at the exchanges, prosecutors raided three cryptocurrency exchanges last month in the capital of South Korea. The raid was carried out over a span of three days wherein they confiscated financial transaction records, computer hard disks, accounting records and mobile phones according to the head prosecutor of the case, Jeong Dae-Jeong. The raid comes at a time when the government continues to struggle as to how to regulate the virtual currencies in the frenetic crypto markets.

Jeong said, “It’s unclear yet whether the transactions can be seen as embezzlement.” The amount of the total transferred funds were not disclosed and neither were the names of exchanges under investigation were revealed. Although, he said that one of the exchanges is located in the Seoul neighborhood of Yeouido which is home to one of the country’s largest cryptocurrency exchanges (Coinone). It has been revealed by the investigation that at least one of the exchanges used the assets of the customers to purchase bitcoin from competitors. Hence, it can be observed that Privacy coins are rapidly gaining attention from mainstream crypto investors. To know more about different Privacy coins available in the market, check this article.

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