In a move that is likely going to sever off a large portion of its content (and we’re certain has nothing to do with the Chinese government), TikTok is now banning financial services, pyramid schemes and cryptocurrencies from its platform.
So much for the number one source where most “investors” get their financial advice nowadays…
The move comes after “users were warned against taking financial advice from TikTok videos over concerns it could be misleading, particularly for younger savers,” according to Yahoo! News.
Financial services and products were added to TikTok’s “globally prohibited industries” list, alongside “lending and management of money assets, loans and credit cards, buy now pay later services, trading platforms, cryptocurrency, foreign exchange, debit and pre-payment cards, forex trading and pyramid schemes,” the report says.
Anthony Morrow, co-founder of financial advice service OpenMoney said: “…the real proof of TikTok’s commitment to cleaning up its act will be in how it enforces the policy to ensure that banned content is identified and removed quickly.”
“We know that social media influencers are fuelling demand for day trading and unregulated investments like cryptocurrencies by talking up the potential returns without explaining the enormous risks involved,” he continued.
And the move is meaningful for TikTok in terms of content views: posts labeled #bitcoin have received 4.4 billion views and those labeled #cryptocurrency have received 1.5 billion views. The report says that the #investment hashtag has received 790 million views, and the hashtag #stockstobuy has received 447 million.
Morrow commented that people should get advice from someone “who’s properly qualified to talk about the options,” Yahoo reported.
In an obvious nod to apps like Robinhood and TikTok, the UK’s Financial Conduct Authority noted earlier this year that young people were “getting involved in higher risk investments, potentially prompted by the accessibility offered by new investment apps”.
The authority concluded that “there is evidence that these higher risk products may not always be suitable for these consumers’ needs as nearly two thirds (59%) claim that a significant investment loss would have a fundamental impact on their current or future lifestyle.”