- The social media giants continue to apply crypto regulations in a bid to protect users from scams.
- Chinese owned social media giant Tiktok has banned adverts on most financial services relating to cryptocurrencies.
- In other developments, Google (NASDAQ:GOOGL) has made a U-turn as it begins allowing crypto-based advertising.
- The continued social media bans on crypto, and the recent Tiktok ban, may be good for the market.
Cryptocurrencies and digital assets have become mainstream over the last decade with many shooting up after receiving massive adoption. DeFi is now an accepted system and is being employed around the world, with over 4000 applications and coins now based on DeFi across several blockchains.
Fierce competition in the sector has led to developers seeking faster ways of achieving mass adoption in as short a time as possible, as relying on product utility alone won’t be enough to reach the desired goal.
Developers have thus turned to social media to gain traction and increase their communities around their shiny new tokens. Generally speaking, fake coins and applications tend to use influencers and social media advertisements to promote their coins and ICOs to gain the necessary traction to defraud users of their money.
Tiktok Brings down the Hammer on Crypto Advertisements
TikTok has banned the promotion of certain financial services from its platform. The ruling will see a blanket ban that includes the promotion of cryptocurrencies.
The popularity of Tiktok has made it a go-to platform for developers and ICOs. Dogecoin enjoyed a healthy rise this year, due in no small part to its wide promotion on Tiktok and other social media apps.
The ban, which was announced on July 8th, means that there will not be any hype for ICOs on Tiktok.
“According to TikTok’s branded content policy, the promotion of all financial services and products is now globally prohibited,”
FT Adviser explained.
The social video posting platform is worried about people running promotions that lure followers in with the promise of riches, while in reality only a scam awaits.
Google Lifts Its Ban on Crypto Advertising
Advertising giant Google had previously banned crypto-based adverts in 2018 due to the rise in associated scams following the ICO boom of 2017. Google has repealed a part of the ban, contingent upon a given promotion meeting certain criteria.
Starting from August, promotions for cryptocurrency wallets will be allowed, however ICOs will remain banned. Google, which initially followed Facebook’s lead in banning crypto, will now let crypto wallets and digital exchanges appear in search options on YouTube and other sites.
On the Flipside
- Social media regulations are always subject to change, so Tiktok’s regulations may still change in the future.
- Not all crypto promotions, or those of other financial services, turn out to be scams.
What This Means for Crypto
There are many conflicting views on whether this move from Tiktok will improve or hurt the market.
While in the short run, it will hurt the immediate success of ICOs and legitimate crypto projects, it could, on the other hand, be considered good, because it will theoretically prevent investors from getting scammed.
Cryptocurrency scams have greatly hurt the market, with Americans losing over $80 million since October last year, according to data gathered by the FTC.
The FTC’s report, in conjunction with others, influenced Tiktok into instigating the ban. Some users feel that the move is good for the market, but bad for crypto influencers whose income is directly affected by the news. Twitter user @QuantInFinance believes that the market will see a huge rally in the wake of the ban.
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