Looking to Facebook for Risky Investment Opportunities Makes No Sense

Article ID: 688841

Released: 1-Feb-2018 3:20 PM EST

Source Newsroom: Northwestern University

Expert Pitch

EVANSTON, Ill. --- Experts from Northwestern University are available to discuss Facebook’s recent ban on advertisements for cryptocurrency and initial coin offerings (ICOs).

Sarit Markovich is a clinical associate professor of strategy in the Kellogg School of Management. Her current research interests focus on strategic interactions in two-sided markets, patents and licensing, enterprise-wide systems and strategic pricing in IT and FinTech markets. Markovich can be reached at s-markovich@kellogg.northwestern.edu.

Quote from Professor Markovich
“This is an interesting move. On one hand, it makes no sense for people to look for their risky investment opportunities on Facebook. On the other hand, theoretically, ICOs are a promising way for startups to raise funds and offer very similar benefits to the benefits Reg A+ offers. In fact, the SEC considers most ICOs — unless you’re raising money for your running club or book club — to be security offerings, and as such they should be registered with the SEC. If investors only invest in SEC registered ICOs, things would be much simpler.

“Cryptos is a different story and are not as regulated. I guess I wonder whether Twitter or LinkedIn plan on following suit. If they don’t, besides liability and maybe ethics, then Facebook’s move likely won’t have much of an effect.”

Rachel Davis Mersey is an associate professor in the Medill School of Journalism, Media, Integrated Marketing Communications. Her work examines the influence of digital media on community-building, identity salience and media use and audiences and their information needs. Mersey has served as an advisory member to the Knight Commission on the Information Needs of Communities in a Democracy. Her book, "Can Journalism Be Saved? Rediscovering America’s Appetite for News," was published by Praeger in 2010.

Mersey can answer questions related to the consumer reactions that caused the cryptocurrency ban and the consumer responses to the ban. She can be reached at rdmersey@northwestern.edu.


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