Short-video-making platform and social media giant TikTok has started banning several financial products and services that promote digital currencies. As per the recent update of TikTok’s policy, it has banned the promotion of cryptocurrencies across its global operations.
This is part of TikTok’s existing policy extension wherein now it prohibits the lending of money assets, digital currencies, foreign exchange, investment services, pyramid schemes, get rich quick schemes. The platform has previously warned individuals and influencers from giving investment advice. TikTok cited concerns of misleading suggestions with outsized returns that sway young investors.
Last month in June 2021, TikTok also joined hands with Citizens Advice for rolling out videos that teach on making informed financial decisions. Back then, TikTok said it wanted to take this effort will spread alertness regarding financial misinformation and help users to make confident decisions.
Speaking to Financial Times, Martin Bamford, head of client education at Informed Choice, said:
“My interpretation of this is [TikTok] are clamping down on directly or indirectly sponsored content which leads to an affiliate link, for example to sign up to a trading platform and get free stocks.
We see a huge amount of this branded content on TikTok, usually from poorly informed commentators, who lure in followers with promises of riches, but in reality are making their money off people signing up via affiliate links.”
It not just TikTok but other popular platforms like Google have come under increased pressure to take action over scam advertisements. Last month, Google initiated a move to tackle and bring down financial frauds on its platform. On the other hand, Google has also allowed regulated firms with SEC approval to advertise on its platform.
This opens doors for legitimate players like Coinbase to promote their products and services in the market. With more clear regulations expected ahead, advertising platforms will able to form better policies for crypto firms.
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