On June 10, one of the top cryptocurrency media sites, CCN, initially announced that it would shut down, citing a June 3 Google Core Update for stifling its traffic.
Writing
on the website, the director and founder of CCN Markets and Hawkfish
AS, Jonas Borchgrevink, blamed the update for an overnight fall of 71%
of the site’s mobile traffic. While Borchgrevink noted that ups and
downs are part of the business, such a vertiginous fall is unprecedented
in its history. At the time of the post, the founder said that it could
not support new additions to its team or its current operations from
advertiser revenue in the given climate.
Within the online crypto media sphere, CCN was not alone in taking a beating. According to data from
Sistrix.com, CoinDesk also experienced a drop in traffic. Crypto news
took what some are alleging to be a targeted hammering, even though
United Kingdom-based online media juggernaut Daily Mail also reportedly
lost half of its organic website traffic.
Related to this: The Strange Case of CCN and the Google June 2019 Core Update
At the time of this post on June 10, Borchgrevink and the CCN team were at a loss as to what could have merited such a steep drop off in visibility:
“If
Google thinks that CCN, all of a sudden – remember, literally overnight
-, is bad, then why not give us the chance to understand the why and
give us a way to change before any major update. Instead, we are kicked
in the teeth overnight with zero knowledge of what we have done wrong,
impacting a team of 60+ people. 6 years of work is evaporated.”
However, only two days later, on June 12, CCN reported
that it had clawed its way back into existence after an intensive
period of consulting with SEO gurus and experts in the Google Webmasters
forum. In the post, also authored by Borchgrevink, it is clear that the
team is still not entirely sure what caused the drop, but continue to
reference the June 3 update:
“Whether or not the
Google June 2019 Core Update is to blame, we are fixing it. We’re
receiving help from multiple SEO teams to understand what has
transpired.”
Expert reaction to CNN’s self-proclaimed struggles
Several
members of the crypto community spoke to Cointelegraph, stating that
the update serves as a prominent example of how powerful, centralized
corporations can currently smother crypto initiatives. Richard Red,
research lead at Decred, a community-directed digital currency, said the
update presents an issue for both freedom of the press and of
information:
“Regardless of how people feel about CCN,
the fact that changes to Google's search algorithm can make or break
media producers is one of many illustrations of the power wielded by
large tech companies running centralized services. A centralized
authority that can selectively ‘hide’ content signals a broader problem
with freedom of the press and the public’s ability to find information.”
Roneil
Rumberg, CEO and co-founder of the decentralized music streaming
platform Audius, also said this is typical of the dangers of centralized
power and called for a more transparent approach to online media:
“The
unfortunate situation faced by CCN is inevitable when centralized
aggregators like Google control content discovery. Those whose
livelihood depends on aggregators have little insight into how these
services work, let alone any say in how they are changed over time. They
are subject to the whims of Google, YouTube, SoundCloud, or whoever
else they are contributing to, and risk being deplatformed, demonetized,
or otherwise taken for granted.”
Tak Kol, co-founder of the Orbs public blockchain,
also commented on Google’s power to shape opinions and called for
change that allows people to protect themselves from what he sees as
abuses of such power:
“The situation with
CCN and publications like it shows how much power Google has in
dictating which news channels can flourish and which should disappear
with a behind-the-scenes change in its algorithm. There is a solution to
protect ourselves against potential abuse — and this is transparency,
through blockchain technology. We should demand filters like Google to
be explicit regarding the criteria of what's deemed important, and we
should demand to audit that this criteria is indeed what's executed
under the hood.”
Ad nauseam: Google’s chequered past with crypto
This
is not the first time that Google appears to have taken a hard line on
decentralization and crypto in general. The most prominent example of
hostility from Google occured
in June 2018, when the company announced that it would ban all
crypto-related advertising in accordance with an update to its Financial
Services policy.
The official announcement came days after crypto advertisers had noticed
a sharp drop in views for its advertisements. At the time, Google
AdWords denied that any change in its regulations would block crypto or
initial coin offering (ICO) ads. However, as previously reported
by Cointelegraph, Google’s updated financial products policy clearly
stated that an advertisement ban will be imposed on “cryptocurrencies
and related content (including but not limited to initial coin
offerings, cryptocurrency exchanges, cryptocurrency wallets, and
cryptocurrency trading advice).”
The move, however, was not necessarily out of character for Google, with Google’s director of sustainable ads, Scott Spencer, demonstrating a hesitant approach to all cryptocurrencies in a March 14 interview with 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.”
In September, the company announced that it would revise its advertising policy in October in order to allow some crypto businesses targeting the United States and Japan.
Fast-forward to January 2019 and Google’s advertising policy on cryptocurrencies remains relatively unchanged, with smart contract auditing startup Decenter tweeting that the company has blacklisted keywords mentioning Ethereum on Google Ads.
In
response, the official Google Ads account replied to the tweet, stating
that exchanges are permitted to target the United States and Japan and
that ads targeting other countries could be liable for rejection.
Decenter further explained
that, when trying to use “ethereum development services” and “ethereum
security audits” as keywords, an error message would pop up. Google Ads
replied to this in a tweet:
Hi
there, thanks for your response. Although we wouldn't be able to
preemptively confirm if your keyword is eligible to trigger ads, we'd
recommend that you refer to the 'Cryptocurrencies' section of our policy
on Financial products and services: https://t.co/BpvQoukwY3. -Chetan
— Google Ads (@GoogleAds) January 10, 2019
Decenter consequently turned to the Ethereum community on Reddit, where the team stated:
“Any
of the keywords that contain ‘ethereum’ in our campaigns are no longer
showing ads as of January 9th and are now reporting the following
error:”
At the time, the Reddit post’s top comment accused Google of a lack of neutrality:
has various political and economic agendas, and they are quite willing
to use their various services to promote their preferences. AdSense and
Youtube are notorious for this, but there have been some incidents
regarding the play store as well.”
Google is not the only centralized tech giant to have a troubled relationship with both crypto and crypto advertising. Prior to lifting the requirements on May 8 for crypto and blockchain promoters to get consent for running advertisements, Facebook had adopted various degrees of censorship.
In January 2018, Facebook decided
to ban all cryptocurrency and ICO advertisements — a move that was
widely criticized by the crypto community as unnecessary. Dejun Qian,
the founder of Fusion, which provides a financial transaction ecosystem,
said:
“This policy will definitely protect
people from the scams of predatory projects. However announcing an
‘intentionally broad’ policy is always the easiest way and not
necessarily the best route for technology development.”
Since
then, Facebook has come to relax its approach to advertising as long as
advertisements are not seen to be promoting one currency in particular
or initial coin offerings. And Facebook has since announced that it will
launch its own stablecoin.
Read more on this: Project Libra: What We Know About Facebook’s Forthcoming Cryptocurrency
E-commerce giants show uniform approach to crypto
It is not only big tech that’s showing resistance to cryptocurrencies. In 2019, two of the world’s foremost e-commerce giants demonstrated varying degrees of hostility to cryptocurrencies and associated cryptocurrency advertising.
On March 18, South America’s largest e-commerce company, Mercado Livre, banned cryptocurrency advertising on its website, according to reporting from Cointelegraph em Portugues. Mercado Livre, which recently overtook Amazon as the top e-commerce marketplace in Latin America, sent
out emails to users that laid out the change in company policy.
According to an email shared with Cointelegraph, all listings related to
digital currency would automatically be removed from the platform as of
March 19:
"We would like to inform you that
as of March 19, you will no longer be able to advertise used products
in the following categories:
- Cryptocurrencies
- Prepaid cards for games
“Because
you have ads for used products that will soon be banned, we recommend
that you end them. Otherwise, they will be finalized on the date
mentioned above."
Mercado Livre’s biggest rival, Amazon, also demonstrated its less-than-enthusiastic approach to cryptocurrencies in 2019. Twitch, a streaming company owned by the U.S. e-commerce behemoth, removed bitcoin (BTC) and bitcoin cash (BCH) as payment options for subscriptions, according to a Reddit user on March 23.
Payday blues: Payment providers close the door on crypto
Although
the initial benefits of cryptocurrency for payment providers are
numerous, a number of high-profile companies have either removed payment
options or outright banned crypto payments.
On May 7, Dovey Wan, a founding partner of Primitive Ventures and a prominent figure in China-related crypto affairs, tweeted that the Chinese social media titan and payment service provider WeChat will ban merchants from making cryptocurrency payments.
A translation of the Payment Service Protocol, posted on weixin.qq.com,
revealed that the ban is due to changes in payment regulation and
efforts to ensure “the prevention of illegal telecommunications networks
and criminal matters” brought about by the People’s Bank of China.
As per the screenshot posted
by Wan, users who carry out crypto trades are liable to have their
accounts terminated. The screenshot also shows that “merchants may not
engage in illegal transactions such as virtual currency.”
Unsurprisingly,
given the chilly atmosphere for cryptocurrencies in China, WeChat is
far from alone in its approach. In August 2018, the mobile payment app
Alipay clamped down on users who were using their accounts for over-the-counter (OTC) bitcoin trading, according to Beijing News.
As per the state-affiliated Chinese newspaper, Alipay
tightened restrictions on and permanently blocked accounts carrying out
bitcoin OTC trades. The article also stated that a system had been
created to monitor key websites and accounts for this purpose.
Misfortune for crypto payments in China continued into 2019, when Alipay and WeChat both requested that crypto exchange Huobi remove their payment services from its OTC trading desk, according to a report by local media agency Sina published on Jan. 25.
Outside of China, the chief financial officer of PayPal said that the company is reluctant to get involved with cryptocurrencies, according to an interview with Yahoo Finance on May 7.
CFO
John Rainey said that, although the company had previously allowed
payments in bitcoin, the volatility of the currency meant that merchants
would just convert bitcoin to a more stable currency, such as the euro
or dollar. Rainey commented that, although the company is not currently
interested in cryptocurrencies, he did not rule out involvement in the
future:
“We have teams clearly working on
blockchain and cryptocurrency as well, and we want to participate in
that in whatever form it takes in the future. I just think it’s a little
early on right now.”
BTC cards suffer setback, Visa and Mastercard categorize crypto as high-risk
In January, Visa ended its working relationship with debit card provider WaveCrest, affecting crypto card products provided by CryptoPay, Bitwala, Wirex
and others. The move was initially believed to be a company crackdown
on cryptocurrency services, but was later revealed to be due to
WaveCrest violating Visa’s policies.
A Visa spokesperson commented that the issue came down to noncompliance on WaveCrest’s behalf and that it had not adopted a blanket ban on such products:
"We
can confirm that WaveCrest’s Visa membership is being terminated due to
continued non-compliance with our operating rules. All of WaveCrest’s
Visa card programmes will be closed as a result. Visa has other approved
card programmes that use fiat funds converted from cryptocurrency in a
number of jurisdictions. The termination of WaveCrest’s Visa membership
does not affect these other products.”
In October, Finance Magnates reported
on the news that payment titans Mastercard and Visa would classify
cryptocurrency and ICOs as “high risk.” The publication, which did not
disclose its sources, reported that a ban will be applied to brokers
operating from “unregulated or loosely regulated environments,” a
sweeping description that proved damning for the wave of crypto debit
cards. As no universal policy exists for regulating cryptocurrency
payments, many companies offering crypto debit card services could, as a
consequence, be seen as not having applied proper due diligence to
their business.
The publication also referred to regulations
brought in by the European Securities and Markets Authority (ESMA) in
June, establishing leverage limits for local retailers in the European
Union. Steve Maijoor, the ESMA chairman, said that the regulation would seek to protect investors:
“The
new measures on CFDs will, for the first time, ensure that investors
cannot lose more money than they put in, restrict the use of leverage
and incentives, and provide understandable risk warnings for investors.”
Unregulated
brokers are reportedly classified as “high-risk securities merchants”
by the two biggest debit/credit card issuers. Mastercard acted on Oct.
12, 2018, and the subsequent changes would affect “all transaction
globally via Mastercard, Debit Mastercard, and Maestro.”
The move
to target crypto debit cards is not that surprising, given the views of
management at the two payment giants. Mastercard CEO Ajaypal Banga voiced his criticism of cryptocurrencies, stating that nonstate-issued coins are junk, due to their high volatility and the as-of-yet unrealized goal of operating as a real alternative to fiat currency.
To
strengthen the narrative, Mastercard released a series of anti-bitcoin
videos, narrated by the president of Mastercard Southeast Asia, Matthew
Driver, in which he questioned the anonymous nature of crypto transactions:
“If it’s an anonymous transaction, that sounds like a suspicious transaction. Why does somebody need to be anonymous?”
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