Snapchat’s Parent Company Snap Announces Ban On ICO Ads

Snapchat has decided to join the ranks of social media companies such as Facebook and Google that have instituted bans on ads related to Initial Coin Offerings (ICOs) on their platforms.

The ICO ban on Snapchat was announced on Monday by Cheddar revealing that Snap, the parent company that owns the social platform has been instituting the policy against ICO ads since February. The announcement also clarified that the ban has been implemented on ICO ads and that cryptocurrency ads, in general, are still allowed on the platform. Snap representatives confirmed that the ban on ICO ads was indeed true but they did not reveal whether the company had plans to extend the ban to other activities related to cryptocurrency.

The fact that Snap has not banned cryptocurrency ads completely means its decision was softer than the bans instituted by companies such as Facebook which decided to ban most of the ads related to cryptocurrencies. Google also recently announced that it plans to ban all ads related to cryptocurrencies in June from its platforms including YouTube. Twitter has also been rumored to be following in the same direction although there has been no official confirmation.

Snapchat’s recent ban on ICO ads echoes the opinion of the Securities and Exchange Commission (SEC) which has been issuing warnings against ICOs. The SEC recently stated that cryptocurrencies can be classified as unregistered securities. More regulatory bodies have maintained a close eye on cryptocurrencies such as the IRS which views digital currencies as assets that should be subjected to capital gains. The Commodity Futures Trading (CFTC) also views cryptocurrencies as commodities.

The situation with the regulatory bodies highlights the back and forth struggle between the cryptocurrency market and the U.S government. This is due to the fact that cryptocurrencies are decentralized, thus making it difficult for governments to enforce regulations like in the case of fiat currencies.  Social media companies have been banning cryptocurrency ads mostly to protect their users from content that might cause them to lose money.

ICOs became quite popular in 2017 as one of the ways through which cryptocurrency companies launched their digital coins and raised funds. However, authorities raised red flags after discovering that scammers were also taking advantage of the situation by using ICOs to make a quick buck. This was largely due to the fact that there was barely any regulation to streamline and legitimize the process and also because the cryptocurrency market is a playground full of uncertainty.