A recent study by dappGambl has revealed that TikTok influencers are posting misleading videos about cryptocurrency investments, with over one in three videos found to be deceptive. The social media platform has become an alternative to Google searches for many individuals, particularly younger generations. However, some influencers have been found to share unvetted misinformation on crypto investments, often trying to convince unwary viewers to put their hard-earned money into loss-making cryptocurrencies.
The analysis of over 1,161 TikTok videos with the hashtag “#cryptok” revealed that only 1 in every 10 cryptok accounts or videos contained some form of disclaimer that warned users about the risk of investments. Additionally, out of the lot, 47% of TikTok creators were found trying to push services to make money. This lack of accountability and transparency highlights the need for better regulation in the social media industry.
The potential financial risk for unwary investors remains equally high, despite TikTok influencers having a smaller reach than their mainstream counterparts. The study also discovered that popular crypto-related hashtags such as crypto, cryptok, cryptoadvice, cryptocurrency, cryptotrading, and cryptoinvesting have cumulatively churned over 6 billion views on TikTok. The platform has become a breeding ground for unverified information on crypto investments, causing viewers to overlook the ill-intent of their favorite influencers and trust their content purely based on the high number of views or likes.
The consequences of this trend are severe, with individuals investing their hard-earned money into cryptocurrencies without proper research, often resulting in significant financial losses. The United States Securities and Exchange Commission (SEC) has also cracked down on the promotion of cryptocurrencies by influencers. The SEC forced Kim Kardashian to pay $1.26 million in penalties for the promotion of EthereumMax (EMAX). Other mainstream influencers such as Jake Paul and Soulja Boy have also been accused of promoting cryptocurrencies to their millions of fans without disclosing payments received.
On April 2, a $1 billion lawsuit was filed against crypto exchange Binance, its CEO Changpeng “CZ” Zhao, and three crypto influencers for promoting unregistered securities. The Moscowitz Law Firm and Boies Schiller Flexner, who filed the lawsuit, referred to the case as a “classic example of a centralized exchange, which is promoting the sale of an unregistered security.”
In conclusion, the study by dappGambl highlights the need for stricter regulations and accountability measures for social media platforms. Both new and seasoned investors are advised to do extensive research on crypto projects prior to making any form of investment. With the potential financial risk for unwary investors remaining high, it is crucial that social media platforms such as TikTok take responsibility for the content shared by their influencers, and ensure that users are properly warned about the risks of investing in cryptocurrencies.