Archives for March 26, 2018

Twitter to ban cryptocurrency ads from Tuesday as online crackdown widens

LONDON (Reuters) – Twitter Inc (TWTR.N) will start banning cryptocurrency advertising from Tuesday, joining Facebook and Google in a clampdown that seeks to avoid giving publicity to potential fraud or large investor losses.

FILE PHOTO: Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 13, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

The prohibition will cover advertising of initial coin offerings (ICOs) – crowdfunding used to raise cash by creating new coins – as well as token sales, the San Francisco-based firm told Reuters on Monday.

The new policy, which will be rolled out over the next 30 days, will also ban ads by cryptocurrency exchanges and cryptocurrency wallet services, unless they are public companies listed on certain major stock markets.

For Japan, these will be limited to crypto exchanges regulated by its national financial regulator, Twitter said.

The firm had said this month it was taking measures to prevent crypto-related accounts from “engaging with others in a deceptive manner”, but faced calls to go further after bans from Facebook Inc (FB.O) and Alphabet Inc’s (GOOGL.O) Google.

Facebook has restricted crypto-related adverts, while Google announced a ban that comes into force in June.

The price of bitcoin, already 4 percent in the red on Monday, fell further after the Twitter announcement. It traded at $7,920 BTC=BTSP on the Luxembourg-based Bitstamp exchange at 1740 GMT, down more than 6 percent on the day.

A man reads tweets on his phone in front of a displayed Twitter logo in Bordeaux, southwestern France, March 10, 2016. REUTERS/Regis Duvignau/Illustration/File Photo

REGULATORS’ WARNINGS

Regulators have stepped up warnings that bitcoin and other virtual currencies are highly speculative and that some could be fraudulent, and that investors should be prepared to lose everything.

But last week the G20 group of rich nations failed to reach a consensus on how to supervise them.

Adverts for virtual coins or ways to trade them have appeared everywhere from London’s transport network to Japanese television as demand for them has soared.

“With the increasing number of ICOs coming to market, it is an impossible task for anyone, much less platforms like Twitter or Facebook, to keep on top of which ICOs and cryptocurrencies are genuine versus frauds,” said Zennon Kapron, director of the financial consultancy Kapronasia.

“Although certainly ICO advertising must have been a significant source of revenue for Twitter, the repercussions of fraudulent activities just weren’t worth the risk.”

Bitcoin has lost more than half its value from a December peak of almost $20,000 as fears of a regulatory clampdown spooked investors. News of the Facebook and Google bans also knocked the price.

Ethereum .MVETH and Ripple’s XRP .MVXRP, the second- and third-biggest digital currencies by market capitalization, have tumbled this year too.

While critics call cryptocurrencies a Ponzi scheme that will end in tears for most investors, supporters say the coins are backed by powerful new technology that can replace traditional fiat currencies and upend the existing banking system.

Reporting by Tommy Wilkes and Fanny Potkin; Editing by Kevin Liffey and John Stonestreet

Facebook shares dip as U.S. regulator announces privacy probe

WASHINGTON (Reuters) – Facebook Inc (FB.O) shares fell as much as 6.5 percent on Monday after the main U.S. consumer protection regulator said it was investigating how the social network allowed data of 50 million users to get into the hands of a political consultancy.

A figurine is seen in front of the Facebook logo in this illustration taken, March 20, 2018. REUTERS/Dado Ruvic

Scrutiny by the U.S. Federal Trade Commission, which generally confirms the existence of an investigation only in cases of significant public interest, adds to pressure from lawmakers in the United States and Europe for Facebook Chief Executive Mark Zuckerberg to explain how his company handles user data.

Facebook shares briefly dipped below $150 on Monday for the first time since July 2017, before recouping some losses. They were down 3.1 percent at $154.37 in afternoon trading.

At the day’s session low the company had lost $100 billion in market value since March 17, when newspapers first reported that Facebook member data was improperly used by consultants Cambridge Analytica to target U.S. and British voters in close-run elections.

“FTC takes very seriously recent press reports raising substantial concerns about the privacy practices of Facebook,” the regulator said in a statement. “Today, the FTC is confirming that it has an open non-public investigation into these practices.”

The investigation is broader than looking into whether Facebook violated a 2011 consent order it reached with the FTC over its privacy practices, a person briefed on the matter told Reuters.

“We remain strongly committed to protecting people’s information,” Facebook Deputy Chief Privacy Officer Rob Sherman said in a statement on Monday. “We appreciate the opportunity to answer questions the FTC may have.”

If the FTC finds Facebook violated terms of the consent decree, it has the power to fine it thousands of dollars a day per violation, which could add up to billions of dollars.

ALL APOLOGIES

The FTC’s move to make its probe public comes as lawmakers in the United States and Europe put more pressure on Facebook and Zuckerberg to explain the company’s privacy practices.

“Facebook’s failure to protect confidential user information likely violated specific legally binding commitments, but also basic norms and standards,” said U.S. Democratic Senator Richard Blumenthal, a member of the Senate Commerce, Science, and Transportation Committee.

The U.S. Senate Judiciary Committee said on Monday it had invited the CEOs of Facebook, Alphabet Inc (GOOGL.O) and Twitter Inc (TWTR.N) to testify at an April 10 hearing on data privacy.

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A bipartisan coalition of 37 state attorneys general also wrote to Facebook on Monday, demanding to know about the company’s role in the manipulation of users’ data by Cambridge Analytica and its policies and procedures for protecting private data.

The U.S. House Energy and Commerce Committee and U.S. Senate Commerce Committee have already formally asked Zuckerberg to appear at a congressional hearing.

Earlier in the day in Europe, the European Union Justice Commissioner asked Facebook if the company is “absolutely certain” that the Cambridge Analytica incident could not be repeated.

Zuckerberg apologized last week for the mistakes the company had made and he promised to restrict developers’ access to user information as part of a plan to protect privacy. He also said sorry in full-page advertisements in British and U.S. newspapers.

“The was a breach of trust, and I’m sorry we didn’t do more at the time,” Zuckerberg said in the ads. “We are now taking steps to make sure this doesn’t happen again.”

‘FUTURE REGULATION’

His apologies have failed to quell discontent. Germany’s justice minister said Facebook’s promises were not enough.

“In future we will have to regulate companies like Facebook much more strictly,” Katarina Barley said after talks to which she summoned Facebook executives including European public affairs chief Richard Allan.

Advertisers and users are also unhappy.

U.S. auto parts retailer Pep Boys suspended all advertising on Facebook on Monday while consumer electronics company Sonos said in a blog post it will remove advertising for its speakers from Facebook, Instagram, Twitter and Alphabet’s YouTube for one week.

Internet company Mozilla Corp, Germany’s second-largest bank Commerzbank AG (CBKG.DE) and British advertising group ISBA all suspended advertising on Facebook last week.

Opinion polls published on Sunday in the United States and Germany cast doubt over the trust people have in Facebook.

Fewer than half of Americans trust Facebook to obey U.S. privacy laws, according to a Reuters/Ipsos poll released on Sunday, while a survey published by Bild am Sonntag, Germany’s largest-selling Sunday paper, found 60 percent of Germans fear that Facebook and other social networks are having a negative impact on democracy.

Reporting by David Shepardson; Writing by Bill Rigby; Editing by Susan Thomas