Cryptocurrency roundup: Facebook U-turns on crypto-ad ban

Welcome back,

Facebook stole the show in the crypto market this week, with its decision to “unban” cryptocurrency ads.

Here are the top stories that caught our eye.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Facebook marks end to cryptocurrency ad ban

Meta, known in a previous life as Facebook, has performed a U-turn on ban on cryptocurrency ads across its platforms.

“We’re doing this because the cryptocurrency landscape has continued to mature and stabilise in recent years and has seen more government regulations that are setting clearer rules for their industry,” a statement by Meta said.

Facebook banned cryptocurrency ads back in January 2018. Under the ban, start-ups and blockchain companies were prohibited from promoting their work and from approaching any customers on Meta’s core social media products such as Instagram and Facebook.

In June 2018 it softened its ban by allowing approved businesses to promote some of their services. And in May 2019, it further softened its stance as speculation mounted whether it would actively participate in cryptocurrencies– it then launched its Libra cryptocurrency project.

The policy change comes as Facebook’s executive David Marcus announced his departure this week. He was at the forefront of creating both Novi and Diem. Novi is the name of the company’s digital wallet, meanwhile Diem is the digital currency that has yet to be offered by the public.

SEC rejects WisdomTree’s proposal to list bitcoin ETF

The Securities Exchange Commission, the US financial regulator, has denied permission for US-based asset manager WisdomTree to list a bitcoin exchange ETF. The SEC rejected a proposed rule change from Cboe BZX Exchange to trade and list WisdomTree’s Bitcoin Trust.

The SEC said that BZX had failed to meet the listing requirements under “its rules in addition to the Exchange Act, saying the BTC ETF proposed would not allow the commission to obtain information necessary to detect, investigate, and deter fraud and market manipulation, as well as violations of exchange rules and applicable federal securities laws and rules,” Coin Telegraph reported.

The SEC has delayed its decision on the Bitcoin ETF many times this year already.

Vietnam police bust $3.8bn crypto raid

Ho Chi Minh City police have detained 59 people connected to an illegal online cryptocurrency gambling ring which had transactions worth almost $4bn, Bloomberg reported.

The ring registered cryptocurrency wallets on Remitano, a foreign platform which allows the purchase of cryptocurrencies such as tether or ether. The funds were then used to gamble on websites, Bloomberg said, citing a report by local broadcaster Vietnam Television.

“Subjects admitted to authorities that they organised online gambling on those sites, which were intermediaries to international betting platform Evolution.com to earn commissions,” Bloomberg said.

HMRC says bitcoin exchanges are not exempt from the digital services tax

HMRC has said that cryptocurrency exchanges will not be exempt from the Treasury’s “tech tax” reports The Daily Telegraph. The digital services tax came into force in April 2020 and is a 2% levy “revenues of search engines, social media services and online marketplaces which derive value from UK users”. It applies to those companies with global revenues of £500m or more per year and UK sales of over £25m a year – companies such as Amazon, Google and Facebook.

HMRC says cryptocurrency assets are not financial instruments, despite lobbying by industry bodies including CryptoUK, which thinks it is “unfair to treat cryptocurrencies differently to other financial assets”. A spokesman for Crypto UK said the plan would lead to higher fees for those who buy and sell cryptocurrencies.

The tax could affect cryptocurrency exchanges such as Coinbase, which last year reported sales in the UK of £18m.

Here’s what happened in the cryptocurrency market in the last seven days:

• Bitcoin fell 3% to $56,850.
• Ether rose 2% to $4595.
• Dogecoin fell 5% to $0.21.
• Cardano fell 1% to $1.65.
• Solana rose 13% to $237.05.

What you need to watch out for

Coinbase Global is developing a Non-Fungible Token (NFT) marketplace which could become a “super app” for trading, lending digital assets and custody, according to Barron’s.