Meta (formerly Facebook) has expanded the eligibility of advertisers to run crypto ads on its platforms by increasing the number of regulatory licenses it accepts, the company said in an announcement on December 1.
Notably, Indian crypto exchanges are unlikely to benefit from this change because the list of accepted licenses does not include any issued by Indian authorities. India’s absence from the list doesn’t come as a surprise because cryptocurrency remains an unregulated space in India. The government is looking to introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, during the winter session of the parliament, which is ongoing, but there is still confusion as to whether the government will outright ban cryptocurrencies or take a more lenient approach.
Commenting on this policy change, Nikhil Varma, Managing Partner at Miglani Varma and Co, told MediaNama:
“This may be a progressive step for the global cryptocurrency industry at large but does not change anything for India. The Damocles sword in the form of the impending crypto legislation still hangs low, and nothing could be said about how cryptocurrency advertisement, or cryptocurrency itself, will pan out going forward.”
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Why is Meta making this change?
“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,” Meta said in its announcement. “These changes will help to make our policy in this space more equitable and transparent and help more advertisers, including small businesses, grow their audiences and reach more potential customers,” the company added.
“There are many startups that are entering the cryptocurrency sector and such ban reversal will help them grow. It will be interesting to see how other internet platforms react to such reversal and the steps they take to leverage their position in the market” – Kritika Seth, Founding Partner, Victoriam Legalis – Advocates & Solicitors
Advertisers, however, still have to obtain prior written permission from Facebook before they can show cryptocurrency ads. These restrictions do not apply to ads promoting other products that use blockchain technology including NFTs and education and news related to cryptocurrencies. Crypto wallets that only enable the storing of assets and not buying, selling, and swapping, are also exempted.
Facebook first banned all crypto ads in January 2018 but slightly eased the restrictions in June to allow advertisers to submit an application to be considered for approval. However, the criteria for approval were not known because the list of accepted licenses was not public and advertisers were considered on a case-by-case basis. In May 2019, the company further eased restrictions and started allowing ads that promoted other blockchain-based products.
Interestingly, Facebook’s new policy comes a day after Facebook executive David Marcus announced his departure from Novi, the crypto wallet Facebook has been working on since 2018. Marcus also worked on Facebook’s own unreleased cryptocurrency Diem.
What are the regulatory licenses Meta accepts?
Meta has expanded the number of regulatory licenses it accepts from 3 to 27. The list includes the following licenses from the following countries:
- Australia:
- AUSTRAC Registration, Issuer: Australian Transaction Reports and Analysis Centre (AUSTRAC)
- Australian Financial Services License / Australian Markets License, Issuer: Australian Securities and Investments Commission (ASIC)
- Austria: Registration as a provider of virtual currencies under the Austrian Financial Markets Anti-Money Laundering Act, Issuer: Financial Market Authority (FMA)
- Canada: Registration as a Money Service Business, Issuer: The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
- Estonia: Virtual Currency Service authorisation, Issuer: Financial Intelligence Unit
- Finland: Registration in the register of virtual currency providers, Issuer: Financial Supervisory Authority (Fin-FSA)
- France: AMF Digital Asset Service Provider registration or license, Issuer: Autorité des Marchés Financiers (AMF)
- Germany: BaFin authorisation, Issuer: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)
- Hong Kong: Licence from, or registration with, the SFC for Type 1, 7 and 9 regulated activities, Issuer: Securities and Futures Commission (SFC)
- Indonesia: Indonesia Commodity Futures Trading Regulatory (BAPPEBTI) approval, Issuer: Commodity Futures Trading Regulatory Agency (BAPPEBTI)
- Japan: Crypto-Asset Exchange Service Provider Registration, Issuer: Japanese Financial Services Agency (FSA)
- Luxembourg: Virtual Asset Service Provider (VASP) registration, Issuer: Comission de Surveillance du Secteur Financier (CSSF)
- Malaysia: Recognized Market Operators (RMOs) status, Issuer: The Securities Commission Malaysia (SC)
- Malta: MFSA licence in terms of the Virtual Financial Assets Act (CAP 590), Issuer: The Malta Financial Services Authority (MFSA)
- Netherlands: Dutch Central Bank (DCB) registration, Issuer: Dutch Central Bank (DCB)
- Norway: Registration with the Financial Supervisory Authority (Finanstilsynet), Issuer: Finanstilsynet
- Philippines: Certificate of Authority (COA) to operate as a virtual asset service provider (VASP), Issuer: Bangko Sentral ng Pilipinas (BSP)
- Singapore: Monetary Authority of Singapore (MAS) license under the Payment Services Act for digital payment token (DPT) service, Issuer: Monetary Authority of Singapore (MAS)
- South Korea: Virtual Asset Service Provider (VASP) report (which can only be obtained upon obtention of ISMS certification), Issuer: Korea Financial Intelligence Unit (KoFIU) / Financial Services Commission (FSC)
- Sweden: Registration with the Financial Supervisory Authority (FSA), Issuer: Financial Supervisory Authority (FSA)
- Thailand: Digital Asset Business license, Issuer: The Thai Securities and Exchange Commission (SEC)
- United Arab Emirates:
- License to engage in arranging, advising, dealing, managing or other relevant financial services and/or operating an exchange and/or provide money services – each in relation to crypto assets, Issuer: Abu Dhabi Global Market, Financial Services Regulatory Authority
- License to operate a Stored Value Facility (that includes virtual assets), Issuer: United Arab Emirates Onshore, Central Bank of the United Arab Emirates
- License to engage in Investment Business / operating an Exchange – specific to Investment Tokens, Issuer: Dubai International Financial Centre, Dubai Financial Services Authority
- United Kingdom: Financial Conduct Authority Authorisation, Issuer: Financial Conduct Authority (FCA)
- USA:
- FinCEN MSB registration, Issuer: Financial Crimes Enforcement Network, (FinCEN)
- BitLicense, Issuer: Department of Financial Services, New York state (NYSDFS)
Additional licenses may be added as they become available and after they have been reviewed, Meta said.
Crypto ad regulation in India
According to a report in the Economic Times, the Advertising Standards Council of India (ASCI) is looking to overhaul guidelines around crypto advertising following discussions with the government. ASCI’s general secretary Manisha Kapoor informed the newspaper that the guidelines will cover some of these issues:
- Adequate disclosure of risk
- Ads misleading consumers over the status of crypto products as legal tender
- Exaggerated claims or unfair comparisons with regulated asset classes
Separately, Finance Minister Nirmala Sithraman on Wednesday said that it was not going to ban ads by cryptocurrency exchanges but that the government is studying guidelines of ASCI and their regulations so that the government can take a decision on how to handle these ads if the necessity arises in the future.
Several cryptocurrency exchanges such as CoinSwitch Kuber, WazirX, and Bitbns have paused advertising across platforms. They had earmarked Rs. 100 crore for marketing in 2021 and targeted several marquee events like the Indian Premier League and T20 World Cup with a reach of millions.
In recent months, exchanges like CoinSwitch Kuber, WazirX, and CoinDCX spent an estimated Rs 50 crore on advertising across mainstream and social media channels, including during big-ticket events like the ICC T20 World Cup and Indian Premier League (IPL). But late last month, crypto exchanges agreed to pause ads following a meeting with Prime Minister Narendra Modi in which the government expressed its unhappiness with crypto ads promising wild profits.
Also read:
- How Cryptocurrencies Get Their Value, Are We In A Bubble, And Can Crypto Be Regulated? Raghuram Rajan Answers
- All The Signs That Suggest India’s Crypto Bill Won’t Ban Cryptocurrencies Outright
- BCCI Asks IPL Teams, Media Channels To Stay Away From Crypto Sponsorships: Report
- New Cryptocurrency Bill Not The Same As One In February, Finance Minister Tells Parliament
- Govt Finds Cryptocurrency Ban Unfeasible Due To Large Crypto Investments By Indians: Report
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