Snapchat Bans ICO Advertisements

The social network follows similar steps by Facebook and Google.

by Marin Marinov
21 March • 2.5 min
In Tech

Snapchat has banned advertisements of initial coin offerings (ICOs) since early February, a company spokesperson told Cheddar on Wednesday. It will continue to sell ads for other crypto-related assets.

The San Francisco-based company has become the latest amongst US social media giants restricting commercials of crypto-related activities. Facebook was the first to ban promotions posts and ads of altcoins, ICOs and binary options in January.

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In March, Google announced it would ban crypto-ads from June because it wants to “tackle emerging threats”. “We updated several policies to address ads in unregulated or speculative financial products like binary options, cryptocurrency, foreign exchange markets and contracts for difference (or CFDs),” Scott Spencer, Director of Sustainable Ads, wrote on the company website.  

Twitter also considers similar moves. Chinese platforms such as Alibaba, Baidu and Tencent haven’t allowed crypto-related advertisements for much longer.
 

Why bans now?

The moves of US social media companies come after the US Securities and Exchange Commission (SEC) issued stern warning against ICOs in December 2017, in which it suggested many crypto tokens could be considered unregistered securities.

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Jay Clayton, the US Securities and Exchange Commission (SEC)` Chairman/Image`s source: sec.gov

In February, SEC Chairman Jay Clayton said he considers every ICO to be a security.

“I want to go back to separating ICOs and cryptocurrencies. ICOs that are securities offerings, we should regulate them like we regulate securities offerings. End of story,” Clayton noted during US Senate hearing.

Snapchat and youngsters

Snapchat ban is important because the instant video and messaging platform is the most popular social network among US Generation Z (18-24-year old). It has had 22.4 million unique monthly users in this age group by August 2017 compared to 23.5 million for Facebook and 22.1 for Instagram, according to research company eMarketer.

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Overall, Snapchat had 187 daily active users worldwide last year, an 18% annual increase, as estimated by the company. It had a revenue of USD 404.5 billion in 2017, up 104% year-on-year.

Snapchat is expected to take a 1.0% share of US digital ads spending this year, compared to 0.6% last year, eMarketer has analyzed. Google had a 38.6% market share in 2017 with a prediction for 37.2% for 2018 and Facebook had 19.9% share for the last year with expectation of 19.6% for this year.