Snap Inc. has banned advertising of so-called initial coin offerings (ICOs) in the Snapchat app, a company spokesperson told Cheddar on Monday.
The move makes Snapchat the latest social media platform to ban ads for cryptocurrency ICOs, an increasingly popular form of raising money by issuing virtual tokens instead of more traditional company shares.
Facebook banned all cryptocurrency ads, including ICO ads, in January — although it still allows educational ads related to the crypto market. Google announced that it would ban all crypto ads last week, and Twitter is reportedly planning to announce a similar ban in the coming weeks.
In contrast to Facebook and Google, Snap’s current ban for ICOs has been in effect since early February and does not apply to other kinds of cryptocurrency ads, according to a Snap spokesperson. The spokesperson declined to comment on whether Snap would ban all crypto-related ads in the future.
Companies raised billions of dollars through ICOs in 2017. But the proliferation of the system as a way to quickly raise capital has led the SEC to reportedly conduct a sweeping probe into the practice. A recent survey by the North American Securities Administrators Association found that millennials were the most at risk of becoming victims of fraud from financial tech-related products.
Snap is facing pressure from investors to continue growing its advertising business amid mounting competition from Facebook-owned Instagram. But the growth has not come without setbacks. The company came come under fire recently for approving an ad that asked whether viewers would rather "Slap Rihanna" or "Punch Chris Brown." A statement by Rihanna criticizing the company later sent Snap’s market value plunging roughly $800 million.
Reporting by Alex Heath.