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TikTok influencers prohibited from promoting cryptocurrency platforms

Financial regulators have demanded regulation of digital currencies

SAMAA | - Posted: Jul 19, 2021 | Last Updated: 2 months ago
SAMAA |
Posted: Jul 19, 2021 | Last Updated: 2 months ago

Photo: AFP

Bitcoin stated that the Chinese-owned video sharing application TikTok has banned its users from using the platform for promoting digital currencies.

According to its statement, lending and management of money along with assets, loans and credit cards, trading platforms, cryptocurrency, foreign exchange, pyramid schemes and investment services are not allowed.

It mentioned that the advertisements which promotes virtual currencies (e.g. bitcoin and ethereum) have been banned in countries like the United States, United Kingdom and South Korea.

The trading in digital currency has come under controversy.

The value of Bitcoin decreased in 2021 after Chinese government intensified a crackdown on cryptocurrencies, which also caused digital currencies to lose their value. People’s Bank of China had called on institutions to not accept cryptocurrencies as payments or offer services or products related to them.

Britain’s Financial Conduct Authority, the US Treasury and European Central Bank had all warned people about risks associated with virtual currencies as well. They stated that it is being used for money laundering, terror financing, and other illegal activities.

The institutions warned investors of their speculative nature as they can crash and pump up based on social media hype and rumours, exposing investors to a huge risk.

Experts call it the most volatile of assets. Some global investors said recent spells of speculative trading in Bitcoin were like what happened in the Dotcom bubble of 2000. Financial regulators across the world sprang in action, demanding strict regulations for cryptocurrencies.

Launched in 2009 by Satoshi Nakamoto, Bitcoin was the first-ever cryptocurrency. Since then, over 10,000 different virtual currencies have emerged, each with a promise to change the future of the financial system.

Touted as digital gold, currency of the future and store of value, these digital assets have given insane returns.

However, experts are divided over their future, some state their values can rise as much as $1 million (in case of Bitcoin), others argue it can be zero because there is no guarantee by any government or central bank that the investors will get the value these prices reflect.

The prices surged notably since December 2020 on account of speculative buying, triggered by a social media hype and statements of support by large companies, including Tesla, Paypal and Mastercard.

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