TikTok has announced the platform will no longer allow crypto ads amongst its revised list of banned financial product promotions. FT report.
TikTok, a popular social video sharing app, has risen in popularity by influencers handing out “non-financial advice” to their viewers and urging followers to hop on crypto bandwagons.
TikTok To Ban Crypto Ads On The Platform
According to TikTok’s brand content policy, the platform will no longer allow financial and cryptocurrency services to promote on its platform. The move comes after the Financial Conduct Authority warned individuals about taking financial information from TikTok over concerns for misleading and providing misinformation to young investors taking on huge gambles.
The FCA has also warned young people investing in meme stocks and cryptocurrencies online, stating “59 percent of investors are open to losses that may have a fundamental impact on their finance.”
Martin Bamford, the head of client education at Informed Choices, said: “My interpretation of this is TikTok is 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.”
Further adding “we see a huge amount of this branded content on TikTok, usually from poorly informed commentators, who lure in followers in with promises of riches, but in reality, are making their money off people signing up via affiliate links.”
Although it is not clear how the new rules will be enforced, Bamford states: “hopefully there is still a place for informed financial education on the platform, as this is the single best way to combat the scammers and charlatans.” Financial Times report July 8, 2021.
TikTok Heads Out With Financial Education Series To Help Make An Informed Financial Decisions
On June 21, TikTok partnered with Citizen Advice, an independent organization in the UK, helping citizens with legal and financial advice upholding confidentiality.
TikTok, partnering with Citizens Advice has rolled out Financial Education Series to educate viewers on financial terminologies to call out financial jargon and how to “Do Your Research.”
Although TikTok has banned crypto and financial products adverts worldwide, it should be noted that Google has eased up its crypto adverting policies. In a recent blog post, the advertising giant will be allowing crypto exchanges, wallets, and mining software to advertise on its network after meeting regulatory requirements. The new advertising policy will roll out on August 6, 2021.