The Chinese video sharing company TikTok attracts million of users to join and use its features. Influencers used to make a lot of money by promoting certain products through endorsements. As per the recent update in its content policy TikTok imposed a ban on the influencers. TikTok restricts to promote any kind of financial services and products on its platform. This includes the promotion of crypto currency over its platform as well.
TikTok bans crypto due to increased Frauds.
As per the company, the ban over such promotions is to stop the frauds, digital scams owing to the increasing usage of social media platforms. This company imposed the ban after China banned the trading and mining of cryptocurrency.
TikTok bans crypto – A Huge setback for financial companies
TikTok said under “Globally prohibited industries”.
It imposed a ban not only on financial services. But on the promotion of alcohol, gambling, and weapons too. Promotion of Financial services includes the promotion of Loans, buy now pay later (BNPL) services, forex trading and Foreign exchange. This is a huge setback for the financial firms. As now they will not get a chance to be endorsed by influencers on the platform.
How TikTok banning FinTok Helped?
TikTok helped companies in spreading word to the masses.
But, now it believes, influencing about buying assets and cryptocurrency ends up misleading the investors. This further, results in scams and frauds. Therefore, to save the interest of such investors, the company restricts the promotion of services by the FinTok (Financial influencers on TikTok). This policy cannot be accessed in India, as the Indian federal government has already banned various Chinese apps, and TikTok is among them.
Similar attitude by Google
Few weeks later even Google did something surprising. Google took a stand against the scam ads running on its platform. As per Google, now the companies that provide financial assistance need to provide their identities to Google. This decision is taken to stop the ads involving scam on it’s platform. Moreover, to provide the information about the advertisers to the users.
TikTok bans crypto – may cost Millions to TikTok
After imposing ban on promoting ads, the influencers may face serious consequences. As they may lose their source of revenue, more importantly the influencers can shift to Instagram reels or YouTube. This can also decrease the amount of traffic on the platform. The ban not only impacted the platform, but the cryptocurrency too. It went down since the official announcement of forbidding the FinTok to promote crypto and other financial services.
FinTok promoting financial assets
FinTok used to post things that were harmless, as suggesting stock to buy when it is rising or is bullish, and selling it when it is decreasing. While others guarantee to make you a millionaire by selling investment courses for hundreds of dollars.
This ban is totally in lieu of the interest of novice investors, as losing money can impact future greatly, therefore in order to protect the interest of the public, TikTok has updated its policy and restricted the promoters.