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Facebook Gets On The Blockchain Train With New Engineering Director

It has long been known that Facebook has been eyeing the crypto and blockchain industry. Rumours were solidified this week when the social media giant named a new engineering director dedicated to blockchain technology.

Evan Cheng, one of Facebook’s senior engineers, has been appointed to the position of “director of engineering, blockchain”, the first for the company. Techcrunch first reported the appointment which was confirmed by Facebook on Thursday though there has been no official press release as yet.

Chang, who was the director of engineering, programming languages, and runtimes before, is now heading up the blockchain division according to his LinkedIn profile. In May, Facebook’s head of the Messenger platform, David Marcus, was tasked with leading the team to further explore blockchain. Marcus is also on the board of directors at Coinbase.

Mark Zuckerberg has expressed interest in the industry earlier in the year when he stated;

“There are important counter-trends to this – like encryption and cryptocurrency – that take power from centralized systems and put it back into people’s hands. One of the most interesting questions in technology right now is about centralization vs. decentralization. A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people’s hands … Back in the 1990s and 2000s, most people believed technology would be a decentralizing force,”

This is a little ironic considering the issues regarding abuse of privacy and data harvesting that Facebook have been grappling with in recent weeks. It is all very well harping on about the benefits of decentralization but when you own the most centralized social media platform on the planet those words carry little weight.

Regardless, the firm is forging on with a new blockchain engineer to explore opportunities for deployment of the technology. This follows its uturn on cryptocurrency advertising last month whereby the company decided that a total ban on the industry was not the best way forward. Those wanting to advertise crypto-related businesses on Facebook now need to submit an application and fulfill certain criteria. This effectively enables the social media giant to cherry pick or censor advertisers at its own whim which kind of centralizes things even further.

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But Why? Crypto Looks for Answers As Facebook Eases Ad Ban

It hasn’t been a great year so far for Facebook, the social media giant that was once the most popular online platform among American youth.

While roughly half of the teens in the U.S. still use Facebook, according to a survey published by the Pew Research Center this year, the company has not been receiving much love recently in light of ongoing controversy about data collection and privacy.

Indeed, though it was the publicly stated goal of CEO Mark Zuckerberg to meet the issues surrounding user privacy and data collection head-on and make 2018 “a serious year of self-improvement”, one that would restore faith in the promise that “technology would be a decentralizing force”, both the company and its CEO seem stuck in a persisting cloud of scandal.

Which is why when Facebook recently announced a change in their advertising policy that would effectively lift a ban imposed back in January over cryptocurrency-related products and services, some social media observers were quick to interpret this change of heart as an act of financial desperation.

However, in the eyes of one Reddit user who works in online advertising, Facebook’s decision is nothing out of the ordinary. In fact, it is “totally normal behavior from any major ad platform. Something new comes up, it all gets shut down, and after some more exploration: ad platform allows people back in,” they wrote.

And looking back on the original announcement published on January 30 by Rob Leathern, Facebook’s product management director, Facebook isn’t exactly doing a 180-degree turn by updating their policies.

The big picture

The point of the ban at its outset in January was to prohibit ads that “promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings and cryptocurrency.”

Binary options, often called all-or-nothing options, as well as initial coin offerings (ICOs), are still forbidden from being advertised on the company’s platform.

Moreover, for the part of the ban that has been lifted, namely on cryptocurrency products and services, a separate application process will screen interested parties and assess eligibility for advertising on Facebook based on “licenses they have obtained, whether they are traded on a public stock exchange, and other relevant public background on their business.”

Leathern emphasized in the post announcing the partial lifting of the crypto ban that, given the application process, “not everyone who wants to advertise will be able to do so.”

Facebook’s cautious approach is one that has been echoed by other major sites, such as Twitter and Google, among others, who continue to prohibit the advertisements of cryptocurrency-related products and services.

Yet, even the partial change of heart by Facebook on this matter has been taken by certain crypto enthusiasts as a sure sign of the growing popularity of the industry that will soon win over other major players.

Rumour has it

As might be expected, Tuesday’s announcement got the speculation wheel spinning as well.

Specifically, Facebook’s ad policy change was seen as a signal regarding its own plans around blockchain, sparking renewed conversation about a suspected in-house cryptocurrency or token.

The rumor first began shortly after David Marcus, the company’s vice president for its Messenger app division and former president of PayPal, said in a Facebook post he would be “setting up a small group to explore how to best leverage blockchain across Facebook, starting from scratch.”

Three days later on May 11, Cheddar published an article titled “Facebook Plans to Create Its Own Cryptocurrency” claiming that the company would explore “the creation of its own cryptocurrency” as confirmed by people “familiar” with the company’s plans.

In addition, other rumors circulating the web have posited that Facebook has plans to buy Coinbase, the largest U.S. based cryptocurrency change by trade volume, in which Marcus sits as a member in their board of directors.

Nevertheless, these rumors remain – just that – rumors.

And ever since the creation of Facebook’s blockchain research team in May, there has yet to be any official statements outlining what, exactly, they are working on.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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IBM, Mediaocean Partner to Tackle Ad Industry Opacity with Blockchain

IBM iX – Big Blue’s digital strategy arm – and ad software provider Mediaocean are teaming up to form a blockchain consortium aimed to solve some of the biggest issues in the advertising world.

The consortium, which has already signed up major brands such as Kelloggs, Kimberly-Clark, Pfizer and Unilever, will be using blockchain technology to ultimately “provide transparency and build trust and accountability” in the advertising industry, according to a press release.

The effort will see the creation of a new blockchain solution – using IBM Blockchain and Mediaocean’s campaign management platform – that the firms say will provide a comprehensive and immutable view of the digital ad supply chain, helping firms firms identify exactly where their ad budget is actually being spent.

Bill Wise, CEO of Mediaocean, said in the release:

“In recent years, … the industry has been plagued with unsustainable economics and transparency issues that hinder progress – particularly around intermediary fees and non-working media. By partnering with IBM, we’re able to launch the first advertising blockchain solution that will improve spend transparency – at scale. “

IBM iX’s Babs Rangaiah commented that blockchain could provide “a single source of truth to any given media buy, eliminating the doubt and uncertainty that is common today.”

The pilot blockchain ad solution will launch in July, the release states.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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'Enough Is Enough': Finance Guru Sues Facebook Over Crypto Scams

Martin Lewis, a British personal finance guru, is suing Facebook for allowing scammers, including some promoting cryptocurrency schemes, to use his likeness in advertisements on the platform.

Lewis is the founder of the MoneySavingExpert blog, and his name and face well known following his years of writing and many TV appearances. In a post to his blog Monday, Lewis explained that he is initiating high court proceedings against Facebook over the issue in a personal capacity, not through MoneySavingExpert. Any damages the court might award him would be donated to anti-scam charities, the post adds.

According to Lewis, over 50 fake ads using his likeness have been published on Facebook within the past year. He names two scams in particular, Bitcoin Code and Cloud Trader – both of which promised outsized profits from trading binary options, a risky asset class that Lewis calls a “near-certain money-loser.”

The Facebook ads in some cases link to fake news articles designed to resemble U.K. news sources The Mirror and the BBC.

A fake BBC news story using Lewis’ likeness linked to from a Facebook ad. Courtesy MoneySavingExpert.

“Enough is enough,” Lewis writes. “I’ve been fighting for over a year to stop Facebook letting scammers use my name and face to rip off vulnerable people – yet it continues.”

He states:

“It’s time Facebook was made to take responsibility. It claims to be a platform not a publisher – yet this isn’t just a post on a web forum, it is being paid to publish, promulgate and promote what are often fraudulent enterprises. My hope is this lawsuit will force it to change its system.”

Facebook announced that it would ban ads for cryptocurrencies and initial coin offerings (ICOs) in January.

Reached for comment Monday, a Facebook spokesperson told CoinDesk:

“We do not allow adverts which are misleading or false on Facebook and have explained to Martin Lewis that he should report any adverts that infringe his rights and they will be removed. We are in direct contact with his team, offering to help and promptly investigating their requests, and only last week confirmed that several adverts and accounts that violated our Advertising Policies had been taken down.”

Lewis acknowledges that Facebook has removed some of the ads, but says it has taken “days or weeks” in some cases, and that the scammers respond by re-posting ads that are all-but identical.

Facebook image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Google to Ban ICO, Cryptocurrency Ads in June

Search giant Google has said it will change its financial product policy in June this year, a move that will see advertisements related to cryptocurrency banned.

In a blog post published Tuesday, the company indicated that it will change its existing financial product restriction list in June this year, blacklisting ad content “including but not limited to initial coin offerings (ICO), cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice.”

“Such ads will no longer be allowed to serve,” the blog reads. In addition, the restriction will apply to Google’s both proprietary and affiliated advertisement platforms.

The move comes just a month after social media giant Facebook also announced on Jan. 30 that the company would enforce a new policy that bans advertisements involving bitcoin and initial coin offerings in bid to prevent cryptocurrency related promotions that may deceive investors.

While Google has not explained in details the reasons of such ban, the new policy comes at a time when regulators in the U.S. have been increasingly scrutinizing cryptocurrency projects that tout various investment opportunities and promote through the internet.

The latest moves by Google and Facebook – two of world’s largest internet and advertising platforms – are also in line with U.S. regulators’ effort at both state and federal levels in cracking down ICOs that appear dubious at government’s oversight.

As reported before, the U.S. Securities and Exchange Commission has also issued multiple warnings regarding its increasing effort in monitoring initial coin offerings that the agency may deem as issuing unregistered securities.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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After Facebook, Will Global Ad Regulators Reject ICOs?

While crypto startups and ICO issuers worry about social media platforms cutting their ads, they could be missing an even more intimidating threat – regulators.

Crypto entrepreneurs reeled late last month after Facebook announced it would be banning “misleading or deceptive” ads about financial products and services, including bitcoin and ICOs. These stakeholders saw a crucial advertising avenue dry up, but according to some, the drought isn’t over yet.

“The regulators will look at advertisements put out by the company. That’s always something they’re going to look at,” said Johanna R. Collins-Wood, an associate at Pepper Hamilton and member of the law firm’s blockchain group.

Others agreed and voiced concern about the industry where you never have to look too far to find suspect advertisements.

Indeed, crypto advertising is a immensely popular Wild West of sorts, where all token sales, legitimate or otherwise, are all vying for attention. And all the issuers and entrepreneurs in the space are still grappling with just what kinds of claims they can make in their marketing.

If the industry doesn’t police itself, regulators are sure to come knocking.

Just recently even, on February 22, France’s stock market regulator, the L’Autorite Des Marches Financiers (AMF), released a statement about looking to curb advertising on cryptocurrency-tied derivatives.

And others may soon follow. According to Collins-Wood, some of the regulators that have already taken a more keen notice of the crypto industry as of late will certainly use advertising to build their cases.

For instance, the Securities and Exchange Commission (SEC) Commodity Futures Trading Commission (CFTC), which held a joint Senate hearing on cryptocurrency earlier this month, will look at whether companies have made fraudulent claims in their ads, she said, adding:

“If they’re looking to bring a case against a company, they will certainly review all the public statements that the company has made and that would obviously include advertisements.”

‘More blatant than others’

Above and beyond financial regulators looking at advertisements to build fraud cases, though, formal guidelines for ads and marketing are less clear at this point.

Many of the regulators that oversee false advertising claims have yet to announce any specific policies on the nascent industry.

“There are a lot of shades of false advertising and misleading advertising. Some are more blatant than others,” said Carl Johnston, a corporate securities lawyer at FisherBroyles LLP.

Case in point, last year, a crypto ad made the rounds on Facebook with a stolen logo from the New Zealand Herald newspaper and an image of the former New Zealand prime minister John Key with a fake quote claiming he invested in bitcoin.

And in Australia, the continent’s securities watchdog received more than 1,200 crypto scam complaints, with one complaint detailing how an exchange advertised that it was an existing Australian company to gain consumer’s trust.

Though, maybe the most mainstream example is that of Japanese exchange Coincheck, which ran a TV ad campaign touting, only to be hacked to the tune of $533 million shortly after.

Several industry observers have since accused Coincheck of downplaying its security protections and criticized for skimping on security spending in favor of lavish ads. Indeed, the CEO of SBI Holdings reportedly called the company “scum of scum” for the spending.

As these instances pique regulators interest to the industry as a whole, some believe advertising regulation is not far away, and looking to the regulations facing traditional companies is probably a good place to start for determining how those rules will be laid down.

“We certainly do have laws against false and misleading advertising,” Johnston said.

Quiet for now

Although Johnston didn’t have any insight into whether the Federal Trade Commision, the government agency charged with overseeing these complaints in the U.S. was active in this area yet.

He told CoinDesk:

“I follow pretty much everything about ICOs that I can and I haven’t seen the FTC’s name a lot.”

The FTC did not respond to requests for comment.

And advertising standards groups have yet to chime in on the subject also. New Zealand’s Advertising Standards Authority told CoinDesk it had not received any crypto-related ad complaints, and the UK’s ad standards body said they had received less than 10 cryptocurrency-related ad complaints so far.

A spokesperson from the UK Advertising Standards Authority continued, “And none have resulted in us finding grounds for an investigation.”

Although, the spokesperson did point to the Financial Conduct Authority (FCA) as the regulator in charge of financial ads, but when asked, the FCA said it has no position on crypto ads.

Speaking to the trend to make sure ICO tokens are compliant with securities guidelines, Collins-Wood said:

“Lawyers are telling clients to focus on offerings that are compliant with securities laws. When you do that, that actually opens up avenues for appropriate and compliant advertising and in many ways eliminates a lot of these issues.”

Effects on startups?

It seems like many are taking a wait-and-see approach.

For instance, even though Russia’s equivalent to Facebook, VK, banned crypto ads last year, the social media platform lifted the ban in August 2017, stating that the restrictions were removed “to open even more opportunities for the active development of the cryptocurrency market.”

With more than a million people on the social network following cryptocurrency communities, the company also said it would reject crypto ads that violated its rules by promoting unsupported guarantees.

No other social network has taken a similar position yet. A Twitter spokesperson said it had no comment on cryptocurrency advertising. And Google pointed to its existing policies on misleading ads, which it said would apply to cryptocurrency.

But even if social media platforms moved to tighten up their procedures, it might have minimal impact on the ecosystem.

According to Midori Kanemitsu, CFO of bitFlyer, which ran both a social media and television ad campaign, the Facebook ban had minimal effects.

“Our understanding is that our TV commercials have contributed to a large increase in users,” Kanemitsu said.

As such, bitFlyer remains cautious about the claims it makes in its advertising.

“We never advertise large returns, low risks, etc. like the advertising from other organizations. For our internal regulation, we look to existing self-regulatory agencies for other industries,” Kanemitsu said, adding:

“We are not legally restricted as to the contents of our ads, but we have constructed careful internal self-regulatory procedures that require us to avoid expressions that may be misleading, and we take ad review very seriously.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in bitFlyer.

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The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at news@coindesk.com.

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This Token Promises Not to Spam You on Social Media

If one token’s newly announced marketing strategy is any indication, the Federal Trade Commission may soon have more warnings to send to social influencers.

Announced today, Singapore-based marketing company Jet8 is launching an initial coin offering (ICO) designed to scale its system for rewarding regular users who effectively promote brands on Instagram, Twitter, Facebook and more. As such, the idea effectively merges a contentious ad model with the red-hot crypto market, itself no stranger to controversy.

But cryptocurrency doesn’t actually mark that big of a shift for Jet8.

In an age where elite Instagram models can earn thousands from a single post, the company has made it easier for brands to scale their social reach by enlisting more average users. Users, in turn, are able to leverage the Jet8 app to share photos or posts with branded frames that then get distributed to major social media platforms.

Once Jet8 launches its own cryptocurrency, however, those rewards will take the form of fungible money. And there’s little risk to brands because they only have to pay rewards for shares that garner actual reactions.

This design is where the benefit lies.

Today, the company’s influencers receive rewards in the form of a virtual currency tracked on its internal ledger system. Jet8 has awarded 4 billion of its virtual tokens to date, points which then must be redeemed at convenience stores in Asia or through an app store.

But with a traditional virtual currency, Jet8 must rely on traditional tactics, negotiating deals with companies to make the tokens redeemable. In this way, the company believes an ethereum-based cryptocurrency can open up the platform to brands.

Shannon Cullum, chief marketing officer for the startup, said that cryptocurrency gives the product more value, stating:

“The increased transparency, flexibility and scalability, that’s the rationale for integrating the blockchain into the project.”

Influencer offerings

To demonstrate the potential of its platform, Jet8 is giving supporters a chance to earn tokens by posting testimonial videos about why they are excited about the token sale. The more engagement these videos receive, the more J8T they will yield.

Cullum himself even kicked off the contest on Instagram.

In contrast to this user-first model, Jet8 has worked under more of an agency approach. In the past, brands would come to it with an idea for a campaign, a target audience and a budget. It would create brand assets for the campaign and message influencers about the opportunity.

Jet8’s secret weapon has been its ability to track the success of different posts. It follows them as they go out onto the web, and it tracks which ones generate engagement. Brands can watch the reach stack up as the campaign goes on through a dashboard that the company provides.

The dashboard squares with a larger trend of brands bringing influencer marketing in-house.

For example, Jet8 recently launched an app-as-a-service model called the Full Stack App. A brand can create its own app that works exactly like Jet8’s, except it can be customized to look like the brand’s own technology, from which it can launch its campaigns directly.

“The advantage of that model is they will be able to create these communities and in a sense decentralize the whole thing,” Cullum explained. “It’s the same technology, the same methodology.”

Real rewards

Still, jumpstarting the Jet8 token by decentralizing a network won’t necessarily be easy, even with tools that could enable such an expansion.

To start, there’s the matter of cultivating a user base. The company will aim to sell $36 million worth of its tokens in an ICO, auctioning off 30 percent of a total 1.5 billion token supply. (Tokens sold in the public sale will go for $0.10 per J8T, the company said.)

Overall, Jet8 expects to raise 70 percent of its ICO goal through a private sale in advance. And while it has declined to disclose investors in the round, it did offer advisory board details. Members include Uriel Peled (Cointree Capital), Eyal Herzog (Bancor) and the founding director of the Bitcoin Foundation, Jon Matonis.

Yet, if this token catches on, its hard to imagine that social media won’t become an even more intense stream of brand messaging. After all, there’s no denying it’s already getting weird among major influencers using traditional tools.

Still, Cullum argued that baldly avaricious sharing won’t be rewarded.

“If I post a Coca-Cola asset on my Facebook page and it’s just blatant advertising. I probably won’t get any likes comments or shares,” he said.

As such, the Jet8 app and token seeks to guide people to post authentic experience with campaign branding that people would respond to either way.

“The way we design the assets, it’s very much about key moments,” Cullum said.

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The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.