Facebook Changes Course, Will Allow More Cryptocurrency Ads

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A picture shows logos of US online social media and social networking service Facebook. the company's shares are taking a huge hit on Wall Street.

In a reversal from its past policy, Meta Platforms Inc., formerly known as Facebook Inc., announced Wednesday that it would expand eligibility requirements for running cryptocurrency advertisements

The company banned cryptocurrency ads in January 2018 but scaled back that ban slightly in May 2019.

Meta said then that advertisers could submit an application and include information including any licenses they obtained.

Moving forward, Facebook will expand the number of regulatory licenses it accepts from three to 27. Facebook clarified to CNBC that it will continue to reject cryptocurrency ads from companies that do not submit one of the 27 regulatory licenses the company is accepting.

“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,” the company statement read.

CNBC noted that the move comes after Facebook tried and failed to launch its own cryptocurrency to send worldwide using Facebook’s services. Facebook had outlined plans for a currency and a digital wallet in 2019, but the move raised red flags from lawmakers and regulators.

Meta's decision comes one day after David Marcus, the leader of the company's cryptocurrency efforts, announced he would leave at the end of the year. Marcus founded mobile payments start-up Zong, which was acquired in 2011 by PayPal for $240 million in cash.

In May, Marcus announced that the company had launched Novi, "the new name and brand for the digital wallet that will help people send and hold Libra digital currencies." The digital currency is run by an independent association and is inaccessible to the public.

The previous ad ban had prevented start-ups in the cryptocurrency and blockchain fields — the technology used to make cryptocurrencies work — from promoting their work and reach potential customers on Facebook and Instagram.

A former Facebook employee told CNBC that Facebook’s move to allow crypto advertising opens the door for retail investors to access cryptocurrencies more than ever before.

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