A recent study by daapGamble has found that over one-third of cryptocurrency influencers on popular social media platform TikTok have been posting misleading videos about Bitcoin and other crypto investments. The study highlights how many individuals now rely on TikTok as the first source of information, foregoing Google and other search engines in favor of the quick and snappy video format offered by the site. Unfortunately, daapGamble’s findings suggest that a significant proportion of influencers on the platform are sharing unvetted and misleading information about crypto investments, often attempting to convince viewers to invest their or their parents’ hard-earned money into cryptocurrencies that will ultimately lose them money.
Many TikTok influencers employ the hashtag “#cryptok” while posting crypto-related content, and daapGamble analyzed 1,161 such videos. The research found that over one in three of these videos were misleading and that just one out of every ten “cryptok” videos or accounts contained any form of disclaimer warning users of the risks of investing. This alarming revelation suggests that 47% of the crypto TikTok creators were attempting to make money by pushing their own services. Even more worryingly, mainstream influencers such as Jake Paul, Soulja Boy, and Kim Kardashian had been previously accused of promoting cryptocurrencies to their millions of fans without disclosing the payments they had received. Regulation does appear to be tightening somewhat, however, with the United States Securities and Exchange Commission forcing Kim Kardashian to pay $1.26 million in penalties for promoting EthereumMax (EMAX).
While crypto influencers have a smaller reach than their mainstream counterparts, the potential financial risk for unwary investors remains incredibly high. One in three misleading videos on TikTok mention Bitcoin, and videos on the platform sporting popular hashtags like #crypto, #cryptok, #cryptoadvice, #cryptocurrency, #cryptotrading, and #cryptoinvesting have cumulatively garnered over six billion views. The problem seems to be that too often viewers overlook the ill intent of influencers and trust their content purely based on its high number of views or likes. Both new and seasoned investors are advised to do extensive research on crypto projects prior to making any form of investment.
This latest news highlights the continuing issues in the crypto world, which remains something of a Wild West. Binance, one of the world’s largest and most successful cryptocurrency exchanges, is currently facing a $1 billion lawsuit, with CEO Changpeng Zhao, and three crypto influencers accused of promoting unregistered securities. The lawsuit, filed by the Moscowitz Law Firm and Boies Schiller Flexner, claims that Binance is promoting the sale of an unregistered security, which is a classic example of a centralized exchange. The plaintiffs estimate that millions of people could be eligible for damages, highlighting again the need for more stringent regulation in the sector.
The crypto world moves incredibly quickly and can be a confusing place for newcomers. As the industry continues to mature, it is likely that we will see more stringent regulations put in place to protect investors. Education is also key, and anyone interested in investing in the sector should take note of the risks and always do their own research. It is vital that investors make informed and educated decisions, rather than being swayed by flashy influencers or catchy hashtags. TikTok is now a key battleground in the ongoing battle for crypto legitimacy, and it is up to the community as a whole to ensure that investments are being made responsibly and with a clear understanding of the risks involved.
