And cryptocurrencies plunge.

You’ve seen the ads here and around the Internet, served by Google: “30X better than Bitcoin” or “The Next Bitcoin,” and the like, promising to make instant millionaires out of those that buy whatever the advertiser has to offer. The American dream. The entire cryptocurrency space is effervescent with scams. This includes the companies that added “blockchain” to their names in order to propel their share prices up by many multiples. When those shares then totally collapsed, they took billions of real dollars formerly owned by naive gamblers with them.

You’ve seen the ads on Google search and other Google platforms, also served by Google’s automated ad server Adsense, touting the latest ICOs (initial coin offerings). Each ICO creates a new cryptocurrency, or “token.” There are now over 1,550 cryptocurrencies and tokens out there. Anyone can do them.

And to promote them, they advertise via ad exchanges, including Google’s Adsense. It’s part of a big wealth transfer scheme: the issuer takes your hated dollar or other fiat currency and runs with it.

Google’s parent Alphabet — it makes about 84% of its revenues from selling ads — along with just about anyone publishing on the Internet, including my WOLF STREET media mogul empire, have been benefiting from the crypto ads. But Google will be blocking those ads – along with ads for some other iffy financial products.

Effective June 2018, according to its latest missive on its financial services policy, Google will “restrict” ads on its exchange for “Contracts for Difference, rolling spot forex, and financial spread betting.” In addition, it will outright block ads on its exchange that promote “Binary options and synonymous products,” and the biggie that it will block:

Cryptocurrencies and related content (including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice).

So this covers just about the entire crypto space. Scott Spencer, Google’s director of sustainable ads, explains on CNBC:

“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies, but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.”

Google’s crackdown is following in the footsteps of Facebook, which published similar policies at the end of January, contending that “Misleading or deceptive ads have no place on Facebook”:

We’ve created a new policy that prohibits 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.

It cited some “examples” of what will be prohibited:

  • “Click here to learn more about our no-risk cryptocurrency that enables instant payments to anyone in the world.”
  • “New ICO! Buy tokens at a 15% discount NOW!”
  • “Use your retirement funds to buy Bitcoin.”

Google and Facebook dominate Internet advertising. Practically all the growth in Internet ad spending goes to these two companies. So this will have an impact.

This doesn’t mean that you will be deprived of the pleasure of seeing crypto-related ads. Far from it. This being the Internet, no one gets to shut anything down entirely, not even Google and Facebook combined. There are thousands of automated ad exchanges beyond Google’s Adsense. There are many other advertising platforms beyond Facebook. There are other search sites than Google. And crypto-related ads will keep percolating throughout the Internet, and we will continue to be amused by them.

But Google and Facebook are so large and control such a massive share of the Internet advertising market that crypto promoters will feel marginalized as they’re losing the biggest avenues for promoting their latest thing. And this didn’t sit well with crypto gamblers today. Here are the five largest by market cap:

  • Bitcoin dropped 9% in 24 hours to $8,355; down 58% from its peak.
  • Ethereum dropped 10% in 24 hours to $621; down 55% from the peak.
  • Ripple dropped 9% in 24 hours to $0.71; down 81% from the peak.
  • Bitcoin Cash dropped 10% in 24 hours to $962; down 77% from its peak.
  • Litecoin dropped 7% in 24 hours to $163; down 56% from its peak.

Cryptos, a form of unregulated online gambling, makes gamblers money as long as they on average continue to buy and as long as they’re out there hyping their gambling tokens – from Facebook and chat rooms to Thanksgiving dinner – to lure new gamblers and their money into the game. That’s how prices are pushed up.

But once gamblers realize that the game is over, the game itself heads down on a volatile and slow path toward irrelevance. And this is starting to happen under an ever broadening crackdown that makes promos, manipulations, and outright fraud just a little harder and riskier to pull off.

This comes after a federal judge confirmed for the first time that cryptos are subject to the same laws about price manipulation as commodities, and that violators can be pursued on the basis of criminal laws. Here’s what that first crypto ruling by a federal judge means, explained by a one of the largest law firms in the US. Read…  Cryptocurrency Manipulators Can Now Go to Jail

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