Bloom is the latest organization claiming to be caught in the crossfire.
Bloom offers a service called BloomID that can be used to sign into apps and online services, with controls over precisely which data the user wants to share.
Among other functions, BloomID can also be used to apply for loans from services such as BMW Financial Services and American Express Middle East. Bloom receives affiliate fees when users sign up for a loan, as well as management fees from integrators. According to Leimgruber, this business model is similar to that of start-ups like NerdWallet and Credit Karma.
Starting in Aug. 2017, Bloom spent a total of $300,000 on Facebook ads, Leimgruber said. The ads were accepted by Facebook — and resulted in September being Bloom's best growth month to date — until Oct. 3.
That was when Facebook sent Bloom a note suggesting the ads ran afoul of Facebook's ban on misleading cryptocurrency ads.
"We don't allow ads that promote financial products and services, such as binary options and initial coin offerings that are frequently associated with misleading or deceptive promotional practices," read the message from Facebook.
BloomID is not a financial product or service and has nothing to do with cryptocurrency.
Bloom has talked about building a better alternative to credit-scoring services like Equifax — its original pitch was "to facilitate on-demand, secure, and global access to credit services." The company uses blockchain technology, which is also the base technology for cryptocurrency, and its website has mentions of words often related to cryptocurrency, including "cryptographically," "Ethereum" and "blockchain." In 2017, the company sold tokens, which are used by developers to create Bloom-enabled apps, but it is no longer selling or advertising them on Facebook, and consumers are not required to possess them to use the BloomID service.
Leimgruber theorizes that Facebook was looking for an excuse to ban BloomID's ads because it competes with Facebook's own sign-in product, Facebook Login (formerly part of a broader service called Facebook Connect). He believes this is unfair, as Facebook has no rules against advertising competing products, Leimgruber says.
"There's no rule in their ad guidelines that says you can't compete with them," Leimgruber said. "Since BMW and other financial institutions are using Bloom as a replacement for Facebook Connect, it's a threat to them."
Facebook has also formed its own internal blockchain group, which is led by former Facebook Messenger boss and PayPal President David Marcus. Although that group is operating secretly, it's possible that the company is planning something similar to what Bloom is doing.
In addition, some of the ads were a little cheeky, which might have drawn Facebook's attention.
"You're being targeted with this ad because the entire history of you is being mined and sold," read one of Bloom's Facebook ads. "But now you can take back control of your data with BloomID."