As TikTok’s popularity continues to surge, the platform has become a hub for financial advice, particularly in cryptocurrencies. However, recent research indicates that many videos contain misleading information or promote scams.
A recent study by dappGambl examined 594 accounts and 1161 videos featuring crypto content on TikTok, finding that a mere 10% of these videos provided disclaimers or warnings about the risks involved in crypto investments.
More concerning, 37% of the analyzed videos were classified as misleading, promoting specific investments without proper disclaimers or implying guaranteed returns.
The study further revealed that almost 50% of the creators in the ‘Cryptok’ niche were promoting their own products and private trading groups, contributing to the proliferation of scams and misinformation.
Impact on young and inexperienced investors
With an estimated 70% of TikTok users under age 34, the platform has increasingly become a primary source of financial advice for younger audiences.
Unfortunately, this demographic is more vulnerable to scams and deceptive practices due to their lack of experience and financial knowledge. Consequently, many users could make ill-advised financial decisions based on misleading TikTok content.
Regulatory measures and crypto advertising concerns
In light of the growing concerns about deceptive crypto advertising on social media platforms, the Federal Trade Commission (FTC) has directed TikTok and seven other sites to disclose their anti-fraud advertising practices.
The UK’s FCA warned influencers about promoting cryptocurrencies and non-fungible tokens (NFTs).
These moves by the regulators align with their broader efforts to address unfair marketing tactics within the crypto industry.
Moreover, TikTok’s CEO Shou Chew recently faced increased scrutiny from the United States Congress, illustrating the platform’s controversial role in disseminating cryptocurrency information.
Safeguarding against TikTok’s crypto pitfalls
As TikTok becomes increasingly influential in shaping financial decisions, users must be wary and skeptical of the platform’s content.
Therefore, users must approach TikTok’s content with a discerning mindset and take the necessary steps to verify the information before taking action. Doing so can protect you from financial harm and help you make informed decisions.