
Facebook lifts cryptocurrency ban amid rumours of Coinbase takeover - dsco
https://www.independent.co.uk/life-style/gadgets-and-tech/news/facebook-cryptocurrency-ban-coinbase-bitcoin-exchange-a8418841.html
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chollida1
I think this makes alot of sense. No real 800lb gorilla in the space yet.

Coinbase is big but they have nowhere near the money, legal reach, engineer
head count, or infrastructure of a Microsoft, Facebook, google or Amazon.

if the rumors of Coinbase making loads of money are true then they make a
great and vulnerable target. I mean Coinbase is the US leader in crypto but
they don't really have any moat around them to prevent one of the big 5 from
coming in and competing with them by slashing trading cost to almost zero.

Where would Coinbase be if trading commissions were gone.

That's got to be a "Netscape loosing all its Navigator revenue due to a free
Internet explorer" type scary for Coinbase.

Even if Coinbase is making money like crazy, you'd think they still have to
seriously consider selling.

~~~
fishyofsea
Hard to classify them as "vulnerable" given how successful they've been
independently and they're privately held. I'd be "vulnerable" to the right
eye-popping offer too, so don't bet on anything right now.

~~~
JumpCrisscross
> _Hard to classify them as "vulnerable" given how successful they've been_

Coinbase’s volumes have consistently fallen every month since December.
January was less than December, February less than January, March less than
February, _et cetera_. That, and their valuation, puts them at risk of having
to (a) lay off lots of people or (b) do a down round.

[1] [https://www.google.com/amp/s/www.wsj.com/amp/articles/can-
th...](https://www.google.com/amp/s/www.wsj.com/amp/articles/can-the-biggest-
u-s-bitcoin-exchange-win-over-wall-street-1527418800)

------
SippinLean
So did they change their mind regarding cryptocurrency being ‘frequently
associated with misleading or deceptive promotional practices’ or did they
just decide they wanted to profit off of it again?

~~~
ucaetano
They realized their own business model is frequently associated with
misleading or deceptive promotional practices, so there would be synergy in
allowing cryptocurrency ads.

~~~
aresant
That is such snark for HN but I couldn't help but laugh.

Back in the day FB had a full on "roll out the red carpet" event for notable
affiliate marketers, led by "Shoemoney" to figure out how they could better
engage that market to bring the diet pill, cell phone ringtone subscription
scams, and "advertorial" formats to the FB ad marketplace.

And it worked brilliantly for years - affiliates figured out how to napalm
international countries with that scammy bullshit and in countries like Brazil
the top ad categories for years were uintentional diet pills scam
subscriptions fulfilled by makeshift international fullfillment centers.

FB let those gorillas into the house, looked the other way as much as they
could, and slapped meaningless "bans" on accounts that were too hot to handle.

Then when they were all grown up and had "legit" ads to swap in they buried
those relationships.

I respect FB as the money printing machine that it is, but their foundation
was built on "deceptive promotional practices" and it's undeniably in their
DNA.

~~~
Method-X
Google did the exact same thing with AdWords back in the day. Doesn't make it
right but I think it's worth mentioning.

------
ehead
Man, this would be wild. What products would come out of this acquisition?

Maybe they'd fully support crypto as a method of payment transfer to replace
their Messenger Payments product. It's not clear if crypto would make their
payments platform so much better that they'd get strong penetration, but in
countries with underdeveloped payments platforms, I can imagine they'd get
some good growth. It'd be very much in line with their vision of connecting
everyone - enable payments between anyone in the world.

~~~
bitsweet
Would not be good for Western Union

------
scottlocklin
FB has been very obviously investing in crypto currency stuff. David Marcus
has been put in charge of this as it says in the article, and I take it he is
an important person. Their recruiters were bugging the hell out of me for a
while, which indicates they're more interested in using ledger tech in
advertising (something I'm working on) than in exchanges, which in fact is
along the lines of their core business needs.

I mean, when was the last time the Economist or Independent broke a Silicon
Valley merger story? Pretty much never, AFAIK. The substance of the story is
Marcus has coinbase connections, and that's about it.

I suppose there is the eternal Winkelvoss/Zuck rivalry, but if that's really
at play here, well, lol.

------
ID1452319
Hold on. How has Facebook had a ban on cryptocurrency adverts since January?
Every day I see another false advert, with a fake Dragon's Den investment
scenario, linking to a site mocked up to look like BBC news.

~~~
akerro
Legit crypto sites were banned because they respect rules, fake, scam was
alive. It's the way all bans work.

~~~
ceejayoz
I noticed a very substantial drop in scammy ICO ads on my Facebook account.

------
chadmeister
Ok, now this would be kind of wild. Is there any real substance to this
acquisition rumor? It's one thing for Facebook to want that easy money from
the adverts, but it's a whole different ball game to want to get into the
crypto space like this. Why wouldn't they just roll out their own crypto?

~~~
handbanana
Coinbase isn’t a crypto currency

~~~
NathanCH
Coinbase invented Bitcoin yesterday

------
394549
I'm not into cryptocurrencies at all, but it doesn't seem like a good idea to
couple Google/Facebook (e.g. nonexistent) levels of customer service with a
banking/investing like product.

Though, it's not like the current crytocurrency exchanges are doing well on
this front (the other day there was a post about how Coinbase support is
terrible), but they're small and have niche brands.

I don't see why a company like Facebook would want to expose themselves to the
costs of employing hundreds of customer service reps and/or the negative PR of
people loosing lots of money or access to their accounts with no recourse.

~~~
snissn
coinbase already has horrendous customer support. I wrote up my experience and
findings of others on twitter in this blog post in December
[https://medium.com/@mseiler1/coinbase-support-is-non-
existen...](https://medium.com/@mseiler1/coinbase-support-is-non-existent-and-
its-a-big-problem-95f38bed7e2e)

~~~
394549
> coinbase already has horrendous customer support.

Yeah, I'm aware of that. To fix it, Facebook would have to hire a bunch of
people well-trained people to take customer calls, but that will be expensive
and violate their user-as-product traditions. The "Facebook Coinbase support"
group might also get tons of _regular Facebook_ support calls, because the
number may be the _only way_ to reach a real human at Facebook when there's a
problem. IIRC, the _Menlo Park Police_ get a fair number of FB support calls
(e.g. "my account was stolen"), because there's no way to reach a human at
Facebook.

The alternative is the leave things as terrible as they are, but that will
just be another avenue for anti-Facebook scandal stories.

------
chirau
From Chris Dixon's of a16z post [1] (Coinbase's largest investor) at the
launch of a16z crypto:

"We are long-term, patient investors. We’ve been investing in crypto assets
for 5+ years. We’ve never sold any of those investments, and don’t plan to any
time soon. We structured the a16z crypto fund to be able to hold investments
for 10+ years."

Makes this all sound like speculation

[1]
[https://a16zcrypto.com/2018/06/introducing-a16z-crypto/](https://a16zcrypto.com/2018/06/introducing-a16z-crypto/)

~~~
Gustomaximus
Or could be a negotiating tactic on price. Or they didn't expect a big offer
as they wrote this.

As investors, everything is for sale. They aren't going to stick to the 10
year plan half way through if billions are put on the table.

~~~
chirau
One of the founders was my college roommate. Without quoting anyone, Coinbase
is not selling anytime soon. At best, it might be a round of financing.

~~~
theNJR
As they say in the midst of an M&A process "Always tell your old roommate what
you're doing".

------
ckastner
I realize that with Coinbase's rumored financial success, this might be a
sound investment... but I really do hope that their intention is not to use
the Facebook platform to push crypto. Hawking their user's data is taking it
far enough.

(Just to be clear, this isn't specifically about or against crypto, this is
about them promoting _any_ asset to unqualified investors.)

~~~
fullshark
Why else would they acquire them?

~~~
ckastner
They could acquire them purely as an investment that generates returns. A
dividend, or whatever.

~~~
fullshark
That seems very unlikely, and would have a high opportunity cost. Seems like
some sort of payments platform is what they would be thinking with this
hypothetical acquisition.

------
guiomie
Coinbase selling out to Facebook would be in my opinion the same as Coinbase
not believing in the future of cryptocurrencies. Why would the founder sell
when this company could be worth much more if cryptocurrencies become
mainstream? The founder could become the equivalent of a modern J.P Morgan.

------
mountainofdeath
I mean, what's stopping Facebook from introducing FaceCoin tommorrow as a
virtual currency like any of the other in-game currencies only offer to buy
real things with it. None of the market-dominating things need Coinbase or
anything crypto related. If they buy, it's purely tapping a hot market.

Keep in mind, once the dust settles, cryptocurrency is probably going to
settle into two buckets: utility and security. Facebook definitively does not
want to be involved in the latter.

~~~
andrewla
> what's stopping Facebook from introducing FaceCoin tommorrow

The same thing that's stopping them from building a rocket ship or a Facebook-
branded pocket knife. _Why_ would they do it?

Either this theoretical coin gives Facebook some advantage -- i.e. the ability
to mint new coins at a whim, or an ICO that gives them a bunch of capital --
in which case that will make it unappealing to large swathes of users compared
to fiat or existing cryptocurrencies, or exposes them to possible regulatory
risk in exchange for capital, which they can easily raise through normal
capital markets. Or it gives them no advantage, so ... why do it?

Purchasing a company like Coinbase doesn't seem to make sense to me in terms
of aligned business goals, but my experience with M&A people is that it
doesn't really matter -- they get rewarded based on perceived dollar value and
execution, rather than whether their actions benefit the company. In the end
nothing would surprise me here, but a priori acquiring a growing company at a
perceived discount to its discounted future value is a good use of cash, even
if only seen as an investment.

------
Keeeeeeeks
I feel like:

1) FB only turned back on ads so that they could get better data on how people
market crypto projects (for their own blockchain team) 2) Added revenue 3) The
article is very, very speculative; one could argue it's about as speculative
as one of these vaporware token sales claiming they have a partnership with
some major brand, and 20%+ of the copy is dedicated to building the
hypothetical value of such a partnership.

Maybe someone made up the rumor as some last-ditch effort to make the price
not go down

------
woodpanel
Just spitballing here, but I could imagine that each of the twos weak spots
(Facebook: declining user growth, fake profiles, need of income via engagement
etc vs. <insert-coin-here>: bad usability, trustworthiness, small-scale
markets, no vendor acceptance etc), could be ripe for great synergies with
such a merger.

------
patrickg_zill
I seem to recall that a prominent litecoin developer was working for Facebook
and he sold all his coins to avoid the appearance of a conflict of interest.
There was a lot of speculation about what this meant when it happened.

~~~
andreygrehov
He worked for Google and was a Director of Engineering at Coinbase.

~~~
patrickg_zill
Your comment drove me to find a link... Charlie Lee, who works for Facebook

[https://www.zerohedge.com/news/2017-12-21/why-charlie-lee-
so...](https://www.zerohedge.com/news/2017-12-21/why-charlie-lee-sold-his-
litecoin)

~~~
andreygrehov
Where does it say that he works for Facebook?

Charlie Lee is a Managing Director of the Litecoin Foundation.

------
asasidh
who said CB was on sale? They are not even letting any more VC investment.

~~~
kristofferR
Everything is for sale as long as the offer is good enough.

~~~
mchahn
It's the old joke "we've established what you are, now we are now just
negotiating the price".

------
phyzome
Anyone else seeing something weird with the scrolling and layout in this
article? The big black bar at the top covers about half the page.

------
r3bl
"Banning" an entire industry from buying ads was a stupid thing to do to begin
with.

~~~
21
Like cigarette bans?

~~~
vkou
I am all for cigarette advertising bans, and I wish that alcohol advertising
was treated the same way.

(I do not smoke, but I do drink.)

------
raleigh_user
There is 0% chance FB can buy coinbase.

Coinbase won't sell. They've built an all time level team and are absolutely
raking in $$$.

This is dumb.

~~~
21
You lack imagination. If Facebook offers Coinbase tomorrow 100 billion
dollars, they won't sell?

~~~
netsharc
That depends.. 100B in cash, Facebook stock, or crypto-currencies? :D

~~~
flashmob
Well, there isn't such thing as 100B in cryptocurrency, so definitely not in
crypto. (It would be very hard/impossible to acquire that amount right now).

This brings us to an interesting thought. Cryptocurrency transaction values
have been steady growing, starting from pizzas to alpaca socks and now it's
even possible to settle multi million dollar transactions. In the the future
we'll probably see larger, billion dollar plus aquisitions settled in
cryptocurrency, why not? For that to happen though, their marketcaps will need
to rise significantly from what they are now, at least to multi trillion
dollar levels.

