TikTok bans crypto ads but some fear it won’t stop shitcoin shilling
Cryptocurrency ads have joined drugs and guns on the list of things that TikTok influencers are banned from promoting on the platform.
Following an update to TikTok’s branded content policy, all financial services and products are off the menu for influencers looking to leverage their following to make money from promotions.
- Branded content is where a user receives payment or a gift for promoting a product.
- The update doesn’t block creators from talking about cryptocurrency.
- Previously creators could get away with cryptocurrency promotions by displaying #ad.
Influencer ads for trading platforms, forex trading, and pyramid schemes have all joined crypto on TikTok’s comprehensive branded content red list.
In recent years, trading platform Robin Hood, crypto web browser Brave, and a raft of altcoin projects have all teamed up with TikTok influencers to shill themselves to the platform’s growing user base.
Indeed, since its launch in 2016, TikTok, owned by Beijing-based ByteDance, has grown its base to over 1 billion monthly active users across 150 different countries.
Young investors particularly at risk
In comparison to social media old guards Facebook and Twitter, TikTok attracts a largely Gen-Z audience.
According to Statista 32.5% of TikTok users are aged between 10 and 19. This means a slew of ads for “the next Dogecoin” or “free cryptocurrency” are likely to have appeared on the timelines of some very young and impressionable users.
As noted by the FT, the UK Financial Conduct Authority (FCA) recently warned of the potential impact social media ads can have on young investors.
Sheldon Mills, the FCA’s executive director, consumer, and competition said in a press release: “We are worried that some investors are being tempted — often through online adverts or high-pressure sales tactics — into buying higher-risk products that are very unlikely to be suitable for them.”
But there’s a loophole…
Crypto influencers regularly rack up millions of views on the platform and this ban on cryptocurrency ads is unlikely to deter them completely.
In fact, thanks to a particular loophole, it’s likely that the unpaid and undeclared hawking of altcoins will continue despite TikTok’s new policy.
As noted by Decrypt, Twitch streamer Jordan Fish said that shitcoin shilling posted under the guise of analysis could continue as influencers use #notfinancialadvise as a get-out-clause.
[Read More: Motherload: Bitcoin giveaway scam network steals $6M in 6 months]
And you only have to look to Twitter to see just how big a job TikTok has on its hands.
The blue bird’s strict advertising rules haven’t prevented numerous crypto scams from reaching millions of its users.
Protos tracked one of the most high-profile of these illegal operations, dubbed the “Motherload” scam, and found that millions of dollars in crypto had been snared by criminals pretending to be big-name celebs.