Chinese video-sharing app TikTok has updated its branded content protection feature, banning all financial companies, products, influencers from advertising cryptocurrencies, stock buying and selling, promotions and “Buy Now Pay Later” schemes. The move is reportedly aimed at combating the growing number of people using the trendy social network to commit fraud, abuse and privacy violations. But it comes just weeks after Beijing imposed severe restrictions on crypto-currency mining operations, citing “local climate issues” and forcing miners to close their stores and relocate from mainland China. The new tikTok pointers hit legitimate financial companies, which can no longer use influencers to advertise.
The inability to pay influencers and TikTok may have led to the end of this period on the crypto-currency platform. However, the sales protection, which allows financial companies to advertise to people over 18, remains in place.
TikTok’s crypto-currency protection update
TikTok recognizes that any branded content advertising financial companies and products is prohibited under the heading “Prohibited Industries Worldwide,” but is not limited to that. The policy is not expected to be available in India after the federal government banned social media platforms as well as a large number of apps from Chinese companies in 2020 and confirmed a permanent ban in January this year. Nevertheless, the report confirms a new security model for TikTok.
Many crypto-currency trading companies are using influencers on TikTok, known as “Fintok” advisors, to increase their influence. As a result, some have given misleading and unregulated financial advice about investing in bitcoin, dogcoin and other currencies to naive young traders who wanted to multiply their money in a short period of time and had no accurate understanding of the market.
TikTok bans advertising for crypto-currencies
In updating its generic content framework, TikTok noted that the following types of crypto-currency companies and products are currently banned on its social media platforms They include crypto-currencies, trading platforms, pyramid schemes, “get rich quick” schemes, bank cards, loans and more.
Current research shows that many of the victims of high-risk investments and get-rich-quick schemes advertised on TikTok are young people, which is alarming given the concerns raised some time ago by the UK Financial Conduct Authority (FCA).
Fighting crypto-currency fraud
TikTok claims that the move is an attempt to stop the rising prices of crypto-currencies and the various frauds and funding schemes promoted in social communities. However, an outright ban could also affect reputable financial companies that use the platform to promote their products.
After Dogecoin went viral in 2020, the social media app became a favorite platform for selling meme-inspired crypto-currencies.
Google’s comparative attitude
As with TikTok, even Google has taken a strong stance against creepy ads on its platform. A few weeks ago, UK-based Google admitted that starting in September, it would require financial service providers to prove their identity in order to combat fraudulent ads on its platform.
Meanwhile, Chinese authorities have expanded anti-cryptocurrency measures, banning the purchase and sale of the high-risk digital currency in Anhui province in an attempt to keep spending elasticity at a manageable level. The campaign actually began in late May, starting with major mining centers in Sichuan, Inner Mongolia and Xinjiang, leading to the collapse of the entire crypto-currency market. Prior to the crackdown, China accounted for about 70 percent of global bitcoin production.