TikTok Bans Crypto Influencers Amid Soaring Scams

TikTok has joined the defense against cryptocurrencies due to growing concerns about financial fraud. It announced an updated branded content policy to end advertising financial services and products worldwide.

TikTok Bans Crypto Influencers Amid Growing Scams

According to the Daily Mail, social media giant TikTok has taken a drastic step to ban not only crypto influencers from its platform, but all creators who promote financial services.

The short video app has banned all financial ads from influencers on the platform, be it cryptocurrencies, stock trading, pyramid schemes, loans and credit cards, buy now for payment services, trading platforms, cryptocurrencies and get-rich-quick programs.

According to the report, the move is directly aimed at curbing the worrying trend of advertising high-risk investments on social media. Many of these inappropriate high risk investments are nothing more than various scams, scams, or plans. As a result of this ban, legitimate financial companies are also affected and can no longer use influencers as they do today.

The ability to advertise on TikTok remains an option for some as the real problem lies with the influencers themselves. Influencers usually receive a flat fee or commission for validating certain coins, exchanges, dApps, or other related products. The advertising policy states that financial services companies are allowed to advertise to users aged 18 and over. However, ads for digital assets and cryptocurrencies have been banned from purchasing ads on the platform.

With many neighboring crypto companies using TikTok influencers known as “Fintok” advisors to expand their global reach, these new rules will have a huge impact on the way the industry markets itself. Without the ability to pay influencers or TikTok for advertising, the days of crypto on the platform could be over.

Reasons TikTok Bans Crypto Influencers Amid Growing Scams – Criticized for Unregulated Financial Advice

The main reason TikTok made this decision is the recent audit that it allowed irresponsibly misleading financial advice. Worryingly, young investors who don’t know better could get caught up in these types of get-rich-quick schemes and get into serious financial trouble.

Several Fintok influencers have posted seemingly innocuous things, suggesting buying a stock when it goes up and then selling it when it starts to fall. Meanwhile, others promise to make you a millionaire in just a month or sell investment courses online for tens of thousands of dollars.

TikTok has taken a tough stance on influencer marketing for its financial investment programs to prevent young TikTok users from falling victim to misleading advertising content on the platform. The proliferation of questionable and problematic content related to various financial services products promoted by unauthorized, inexperienced influencers has become a source of fraud.

The Financial Conduct Authority (FCA) has specifically warned younger and more vulnerable viewers for having a bad history with TikTok’s unfiltered financial content.

According to a February report by the UK’s Financial Conduct Authority (FCA), TikTok has been used to target young and naive investors looking to make money quickly. Many of these influencers recommend investing heavily in stocks like GameStop and AMC.

The FCA report states, “The results suggest that there is a new, younger, more diverse group of consumers making riskier investments, likely in part motivated by access to access through new investment apps.” The report shows further that around 60% of young investors believe that losing their investment will have “profound effects on their future lifestyles”.

The growing concern of TikTok’s financial influencers

Holly Mackay, CEO of Boring Money, an investment and financial advisory platform; expressed concern about unfiltered, fraudulent financial advice on the Internet.

“The only motivation for unqualified influencers to talk about financial products is to make money. With that removed, the path remains wide open for those looking to help and inform … most major brands are still struggling to get their attention on Twitter, let alone TikTok development so this should only cleared up those who spread Mackay said.

After the “red alert” of crypto advertising in the UK, crackdown has resulted in the social network expanding worldwide. Leading companies have said they support advertising filtering for financial products and services. First, Google has announced a campaign to remove misleading advertisements for “savings and investment fraud” in the UK.

Starting August 30th, businesses must be authorized by the FCA or qualify for one of the “limited exemptions” in order to advertise financial products or services on Google.

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