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Facebook is Shutting down Cryptocurrency Startup Ads, but only of Competing Products

Facebook is Shutting down Cryptocurrency Startup Ads, but only of Competing Products

Reading Time: 2 minutes by on October 31, 2018 Altcoins, Blockchain, Exchange, Finance, News, Platform, Tech
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On October 30, 2018, Yahoo! Finance reported that Facebook recently banned ads from Bloom, an online identity management service which focuses on online identity protection. According to the report, Facebook said this By merely as the firm was offering deceptive financial services products.

However, Bloom claims that although users can apply for loans using its service, the company doesn’t actually have any financial products to sell. The company believes that this is in part because Bloom competes with Facebook’s identity service “Login.”

Facebook’s Crackdown

In January 2018, Facebook imposed a ban on cryptocurrency-related ads and removed all ads related to. As part of this crackdown, the company removed lots of misleading content including hundreds of pages that were spamming users on Facebook to drive traffic to their websites.

The move was so harsh that there was even collateral damage as Facebook blocked dozens of advertisements for being political. While the company had blocked all ads related to cryptocurrency, it changed its policy to allow ads in June 2018. 

A Facebook representative said:

“While we loosened the policy this summer, it remains restrictive. We will continue to listen to feedback, look at how well this policy works and continue to study this technology so that, if necessary, we can revise it over time.”

Facebook Trying to “Eliminate Competitors”

Bloom, is a company that is building technology which helps people keep control over their data as they sign into various online services and apps. The company’s co-founder, Jesse Leimgruber believes the ban was due to his company being a direct competitor with Facebook’s own identity management platform, Facebook Login (formerly Facebook Connect).

Leimgruber says the company spent hundreds of thousands of dollars on Facebook ads until suddenly being ads earlier this month. Answering to Bloom, Facebook stressed the company ads were taken out as part of a crackdown on ads that might be financial products and services related to cryptocurrency.

Despite Bloom not having anything to do with cryptocurrencies or financial products or services it uses blockchain technology, and as such the company’s official website contains keywords that are usually associated with these industries. Simply by having words like “Ethereum” and “blockchain,” Facebook ordered the ban.

Bloom Appeals the Ban

Leimgruber said Bloom already appealed to the ban. Recently, Facebook also created its internal blockchain department led by former Facebook Messenger chairmen and PayPal President David Marcus. Up until now, there are no reports to what the company might be planning, but everyone expects to be something very similar to what Bloom is doing. This has led Leimgruber to believe this is a direct attack from Facebook to his company.

Bloom offers a service called BloomID that can be used to sign into apps and online services, with controls over precisely which data the user wants to share. The BloomID app also allows users to apply for loans while Bloom receives affiliate fees when users sign up for a loan. According to Leimgruber, this is a legit business model which has nothing to do with financial services or products.

Leimgruber says that since Aug. 2017, Bloom has spent about $300,000 on Facebook ads and now the company suddenly sees its ads being banned for an absurd reason. Leimgruber thinks this dispute shows how Facebook’s is quietly trying to clean competitor. According to Yahoo, Facebook has been purging pages, accounts, and advertisers in a clean-up effort after more than a year of scandals involving misleading content and the misuse of personal data. Over and all Bloom was just one more company affected by Facebook.

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