Google Bans Cryptocurrency Ads

Summary

WSJ Your Money Briefing | “Google Bans Cryptocurrency Ads”

Date: March 15, 2018
Host: JR Whalen
Guest: Douglas MacMillan (Wall Street Journal Tech Reporter)

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Episode Overview

This episode explores Google’s decision to ban advertisements for cryptocurrencies and related speculative financial products across its platforms. The discussion addresses the reasons behind the ban, consumer protection concerns, the rising phenomenon of “cryptojacking,” and how major online advertising players like Google and Facebook are shaping the digital marketing landscape for crypto-related products.

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Key Discussion Points & Insights

1. Google’s Cryptocurrency Ad Ban (02:19–04:28)

• Overview:
  Google announced it will ban advertisements for cryptocurrencies and related speculative financial products, effective June.
• Rationale:
  • Concerns over consumer harm due to risky investments, like initial coin offerings (ICOs), which often involve unproven startups raising funds through digital currencies.
  • Regulation and industry experts have flagged potential risks to consumers’ financial security.

Douglas MacMillan [02:29]:
“These are risky investments. And more and more people, from regulators to us in the press, to a lot of experts out there in the world, are saying that these could potentially pose a consumer harm to people.”

• Scope:
  • Ban extends across Google’s vast ad network, including platforms like YouTube.

2. Rising Threat of Cryptojacking (03:26–06:18)

• Explanation:
  “Cryptojacking” is a hacking tactic where malicious code in ads or websites hijacks users’ computing power to mine cryptocurrency, often without consent.
• Google’s Response:
  • Already acted to block such ads; removed about 130 million ads in violation of policies in the previous year.
  • Cryptojacking had notably affected YouTube ads, reaching large numbers quickly.

Douglas MacMillan [03:38]:
“Hackers have found a way to insert lines of code in websites sometimes, and sometimes even in advertisements, that simply by looking at that line of code... a hacker can get control of your computing power and use that to mine for cryptocurrency.”

• Significance:
  Not the most widespread threat yet, but prevalent and disruptive enough for Google to take decisive action.

3. Google’s Role as Market Regulator (04:28–05:38)

• Advertising Policy Context:
  • Google bans other types of risky or dangerous products—e.g., weapons, counterfeit goods, recreational drugs.
  • Cryptocurrency and ICOs are now added to this restricted list.
  • As the largest online advertiser, Google’s policy can shift marketplace standards significantly.

Douglas MacMillan [04:42]:
“Google... can effectively play regulator over what types of ads... many people on the Internet see.”

4. Industry-Wide Moves: Facebook’s Precedent & Policy Impact (06:18–07:16)

• Trend:
  Facebook instituted a similar ban in January, signaling an industry-wide shift among major digital platforms.
• Regulatory Gray Area:
  • The SEC (US Securities and Exchange Commission) is moving toward more regulation of cryptocurrencies, but tech companies are acting first in protecting consumers.

Douglas MacMillan [06:22]:
“We now have very powerful duopoly of the largest online advertising companies making a very strong play against cryptocurrency ads, which are still in this gray zone for a lot of people.”

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Notable Quotes & Memorable Moments

• On Potential Consumer Harm:

  “Potentially, it will help protect consumers from losing their retirement account betting on bitcoin.”
  — Douglas MacMillan [02:29]

• On Cryptojacking’s Reach:

  “When hackers were able to put that line of code in YouTube ads, it was able to reach a lot of people really quickly.”
  — Douglas MacMillan [05:42]

• On Tech Companies as De Facto Regulators:

  “Google... can effectively play regulator over what types of ads... many people on the Internet see.”
  — Douglas MacMillan [04:42]

• On Industry-Wide Action:

  “We now have very powerful duopoly of the largest online advertising companies making a very strong play against cryptocurrency ads...”
  — Douglas MacMillan [06:22]

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Timestamps for Important Segments

• 02:19 — Start of discussion on Google’s crypto ad ban
• 03:26 — Explanation of cryptojacking and Google’s response
• 04:28 — Google’s broader advertising policies and ability to move markets
• 05:42 — Notable example of cryptojacking via YouTube ads
• 06:18 — Other platforms banning crypto ads; Facebook’s precedent
• 07:16 — Conclusion of main discussion; sign-off

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Summary Flow & Takeaways

This episode examines a pivotal change in online advertising, as Google joins Facebook in banning cryptocurrency ads to protect users from financial risk and cybercrime like cryptojacking. As some of the world’s most influential tech companies step in, their actions may preempt formal regulatory measures, shaping the market and the public’s exposure to high-risk financial products.

Listeners come away understanding:

• The basic motivations and potential consumer protection behind Google’s ban.
• How cryptojacking has evolved as a cybersecurity threat.
• The power of digital advertising platforms to influence which financial opportunities (or risks) reach the public.
• The broader context, with major tech firms acting ahead of government regulators.

The tone of the podcast is explanatory and accessible, aimed at helping listeners make sense of complex financial technology trends with clear, real-world examples and direct commentary.

Transcript

[Charles Schwab Announcer]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. [e-mail] Washingtonwise your money briefing Money and

[JR Whelan]

market stories from the Wall Street Journal I'm JR Whelan at the Wall Street Journal in New York. Google bans advertising for cryptocurrencies. We'll have details on that in a moment, but first, here are some money items you need to know from the Wall Street Journal moneybeat team. President Trump's decision to fire Secretary of State Rex Tillerson could tilt the balance of US Foreign policy against major oil producers Iran and Venezuela, thereby boosting oil prices. That's the word from industry analysts, and the White House's move to replace Tillerson with CIA Director Mike Pompeo could spell the end for the 2015 international agreement to curb Iran's nuclear program. If the US were to exit that deal, it would likely result in the reimp of economic sanctions on Iran that would limit its oil exports and reduce global supply. Lawmakers in Washington have proposed adding a provision to a bank deregulation bill that would require mortgage finance giants Fannie Mae and Freddie Mac to consider credit scores beyond FICO's scores for determining a mortgage applicant's creditworthiness. Fannie and Freddie backed nearly half of all US mortgage dollars originated in 2017, and FICO remains the dominant score for US consumer lending. It also has a big hold on mortgage related business because its score is the only one lenders can currently use for mortgages they plan to sell to Fannie and Freddie. And the Wall Street Journal Heard on the street team says we should expect consumer spending to pick up. Retail sales weakened for the third month in a row in February, but that lull could have been brought on after a burst in replacement goods spending that followed a series of strong hurricanes late last summer. Heard on the Street's Justin lehart says job market strength and fatter paychecks should begin to push retail sales higher through 2018. You're listening to your Money Briefing from the Wall Street Journal. Welcome back, everybody. Google has joined the list of tech companies that have banned ads for cryptocurrencies and other speculative financial products on its advertising platforms. Wall Street Journal Tech reporter Douglas McMillan joins us from our San Francisco bureau to discuss. So Douglas, cryptocurrencies have become very popular and there are probably plenty of opportunities for advertising. But but that popularity has raised lots of problems and raised lots of eyebrows among online sites.

[Douglas McMillan]

Yeah, there are more and more ads for what's called initial coin offerings across the web that are basically advertisements for companies who are unproven startups who raise funds by selling digital currency. That is usually cryptocurrency. These are risky investments. And more and more people, from regulators to us in the press, to a lot of experts out there in the world, are saying that these could potentially pose a consumer harm to people. This is one more step. Google is one of the largest advertising companies on the web, and it's coming forward and saying it's going to ban advertisements for cryptocurrency across its ad network on the web. So potentially, it will help protect consumers from losing their retirement account betting on bitcoin.

[JR Whelan]

Now, Google's ban takes effect in June. The scammers that are behind these ads have become particularly adept at employing a tactic known as cryptojacking to trick web surfers. Can you just explain what that is?

[Douglas McMillan]

Yeah. This is a particularly scary incarnation of cryptocurrency ads. It's actually more of a form of hacking. And what it is, is in order to create cryptocurrency, like a bitcoin or ethereum, you need to harness a lot of computing power. So hackers have found a way to insert lines of code in websites sometimes, and sometimes even in advertisements, that simply by looking at that line of code or looking at that advertisement on a website, a hacker can get control of your computing power and use that to mine for cryptocurrency. So it's a pretty surprising way of generating new cryptocurrency that is becoming not widespread, but a little bit more prevalent. And Google said it's begun blocking those ads that it finds on the web.

[JR Whelan]

And Google has been hot on the trail of these ads for a while. It says that last year, it tried to remove about 130 million of them. And they do this for ads that violate its policies. And 130 million is a very small percentage of the number of ads they actually have on their site.

[Douglas McMillan]

One way to look at Google's announcement today is they are creating a new category of types of ads that are banned that will join other ad bans they have, Such as they don't allow you to advertise weapons, or they don't allow you to advertise counterfeit goods or substances they see as dangerous, such as recreational drugs. So Google, which is, again, the largest online advertising company, can move the market in the direction that it wants. It can effectively play regulator over what types of ads many Many people on the Internet see, it has determined now that risky financial products like cryptocurrency are one more dangerous, potentially dangerous ad that it doesn't want people to show on its network of ads.

[JR Whelan]

They've had a particular problem with ads that are appearing on YouTube, which Google also owns.

[Douglas McMillan]

Yeah, that crypto jacking, the ability for hackers to control your computing power. One of the most prominent cases was actually in January, Google said that ads on YouTube were enabling hackers to do that cryptojacking. Cryptojacking is not particularly widespread, prominent use of this format of advertising. But when hackers were able to put that line of code in YouTube ads, it was able to reach a lot of people really quickly.

[JR Whelan]

And Google isn't the only online platform that has banned cryptocurrency ads.

[Douglas McMillan]

That's right. Google is following in the footsteps of Facebook here, which is the other largest online advertising company who said in January something very similar, that they were planning on blocking cryptocurrency related ads. We now have very powerful duopoly of the largest online advertising companies making a very strong play against cryptocurrency ads, which are still in this gray zone for a lot of people. The sec, the US securities regulator, has started to move in the direction of doing more regulation of cryptocurrency. But here we have an example of two of the largest online advertising companies making the stand first and saying, hey, we're going to put our foot down. We're not going to allow any more of these ads, particularly for things that are risky, like initial coin offerings.

[JR Whelan]

All right, that's tech reporter Douglas McMillan joining us from our San Francisco bureau. Doug, thanks for being with us.

[Douglas McMillan]

Thanks a lot.

[JR Whelan]

And that's your money briefing. I'm JR Whalen in New York for the Wall Street Journal.

[Charles Schwab Announcer]

This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day, but what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. [e-mail] WashingtonWise.