According to the Daily Mail, social media behemoth TikTok has taken a major step toward banning not just bitcoin influencers, but any influencers who promote financial services. Cryptocurrencies, purchase now pay later businesses, loans, credit cards, and Forex companies are just a few examples of the type of content that no longer can be promoted on TikTok.
The measure, according to the article, is targeted squarely at halting the alarming trend of high-risk investments being promoted on social media. Many of these inappropriate high-risk investments may actually be frauds, scams, or schemes. Legitimate financial companies will also be impacted by this shadowbanning, and will no longer be able to use influencers in the same manner they do today.
The Rise of Fintok Influencers
Some “fintok” influencers offered apparently innocuous advice, such as buying a stock while it is rising and selling when it starts to fall. Others, however, claim to make you a billionaire in a month or sell tens of thousands of dollars in online investing courses.
TikTok has been used to target young and naïve investors seeking to make a fast profit, according to a February study by the Financial Conduct Authority (FCA) of the United Kingdom. Many of these influencers advised consumers to put money into companies like GameStop and AMC.
TikTok has lately been chastised for users’ unregulated financial advice. TikTok’s move is mostly motivated by recent criticism the company has received for recklessly permitting false financial advice. The reason for worry is that inexperienced young investors may get entangled in get-rich-quick scams and wind up in severe financial difficulties.
The Future of Crypto Ads on Social Media
For others, the possibility to promote on TikTok remains an option, since the true problem is with the influencers. For promoting certain cryptocurrencies, exchanges, dApps, or other connected goods, influencers are often paid a fixed fee or commission. Financial service businesses are permitted to advertise to targeted users above the age of 18 under the ad policy. Ads promoting digital assets and cryptos, on the other hand, are already banned from being purchased on the platform.
Because many crypto-related businesses rely on TikTok influencers, sometimes known as “Fintok” advisers, to expand their worldwide reach, these new restrictions will have a significant impact on how the sector promotes itself. Without the option to pay influencers or TikTok for advertising, cryptocurrency’s time on the platform may come to an end.
Instagram, a Facebook-owned social media site, continues to accept sponsored cryptocurrency advertising. Kim Kardashian used the hashtag #ad to advertise an unknown cryptocurrency called EthereumMax to her 228 million Instagram followers last month.