TikTok, a popular social media network, has begun cracking down on advocates of financial services goods like stock trading, buy now pay later, and cryptocurrency.
According to the latest upgrade, the platform aims to combat the rising number of social media frauds and unsuitable high-risk investments.
The current crackdown, on the other hand, will have a direct impact on legitimate financial firms.
The new rule is required to combat fraud.
Fintechs and banks have increased their desire to work with TikTok stars to promote their services. Revolut and Monzo, in particular, have been quite active on the social media platform. The popularity of the Plum content and savings app is also increasing as a result of influencers' TikTok promotion.
The new rule, on the other hand, will reduce these actions on the platform. The goal of the rule, according to the newspaper, is to combat the growing threat posed by high-risk investment operations on social media.
According to the site, the majority of these activities promote schemes, scams, and frauds rather than genuine goods. Most of the platform's activities have been banned, according to the platform, which may affect genuine financial firms as well. TikTok still allows advertisers to place ads on their platforms. This time, though, the site will cut out influencers, which is the true problem.
Influencers are typically compensated in the form of a fixed fee for endorsing specific apps, exchanges, coins, and associated products.
Massive ramifications for the industry
Financial services firms can advertise to targeted individuals over the age of 18 under the ad policy. However, advertisements for cryptocurrencies and other digital assets are no longer permitted on the network.
Many crypto-related firms rely on influencers to reach out to customers and grow their brands. This new rule will have a significant influence on the sector. The days of cryptos on TikTok are numbered without the capacity to pay for advertising or pay influencers.