Popular social media app TikTok updated its policies last week, which includes banning cryptocurrencies and all types of related promotions. Users will no longer be able to post photos or videos that talk about cryptocurrencies and how to invest in them.
The ban was made to address the concerns of younger users being targeted and taken advantage of by influencers who promote meme-based digital assets. The policy note that TikTok released along with the update talked about the platform’s goals for its account holders.
‘These policies are designed to ensure a safe and positive environment for our users,’ the statement said. The changes are reflected in their policy information under financial services and products.
In these changes, TikTok specified that they prohibit all topics related to the promotion of cryptocurrency, trading platforms, loans and credit cards, investment services, and many more.
Meng Liu, a blockchain analyst at Forrester spoke with Forkast News, discussing the responsibilities of a platform like TikTok.
‘TikTok is a global platform, so it needs to comply with laws and regulations in different jurisdictions,’ Liu said. ‘The crypto regulations and laws are still opaque in many countries. Therefore, the potential compliance costs are uncertain and can be huge.’
The Financial Conduct Authority (FCA) in the UK has also spoken out in a statement last February, stating, ‘There is a new, younger, more diverse group of consumers getting involved in higher-risk investments, potentially prompted in part by the accessibility offered by new investment apps’.
While promoting products and services is widespread in TikTok, cryptocurrency and investment topics could prompt younger audiences to take risks and try investments without the correct knowledge.
Also known as StockTok or FinTok influencers, these users make partnerships with financial companies and crypto platforms to promote their experience to thousands or millions of viewers and convince them to make accounts and start investing on their own.
Similar platforms like Facebook have also taken measures to prevent the uncontrolled promotion of digital assets and financial apps. This is so younger or uneducated users won’t be exposed to phishing scams or other poor investment ideas.
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