Can You Trust the Crypto Advice on TikTok?

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More than 1 out of 3 influencers on TikTok, the go-to social media platform for the young generation, have been found to post misleading videos about Bitcoin BTC and cryptocurrency investments in a recent study by dappGambl.

Misleading Crypto Videos on TikTok

TikTok has been widely adopted as a video-based alternative to Google searches. However, some influencers have been found to share unvetted misinformation on the social media platform about crypto investments, often trying to convince unwary viewers to put their (or their parents) hard-earned money into loss-making cryptocurrencies. Are you looking for a solution for Crypto Trading Addiction?

The Use of Hashtag Cryptok on TikTok

TikTok influencers use the hashtag ‘#cryptok’ while posting crypto-related content. An analysis of over 1,161 such TikTok videos — conducted by dappGambl — revealed that over one in three videos on crypto TikToks were misleading. The research also found that merely 1 in every 10 cryptok accounts or videos contained some form of disclaimer that warned users about the risk of investments.

TikTok as a Platform for Learning

TikTok is no longer just a social app, it is a platform for knowledge, hacks & learning. Videos with the #LearnOnTikTok have amounted more than 492 billion views, and counting.

The Rise of "CrypTok"

First Came “FinTok”, Now Enter “CrypTok”. The aptly named FinTok is the corner of the platform that provides educational and financial advice around wealth management and investment. With the short entertaining video content there have been over 2.7 billion views of the hashtag. FinTok is expanding quicker than ever.

But FinTok isn’t alone. CrypTok is a growing niche within a niche with influencers who are claiming to be experts offering their tips and services to users. With the platform rewarding popularity over trustworthiness and regulated content, TikTok (and YouTube) is rife with scams and misinformation.

Just because a video has a lot of views and likes, it doesn't mean that the information in it is true or trustworthy. Some people on TikTok may be trying to trick you into believing something that's not true so that they can make money or become famous.

So, if you see a video that is encouraging you to buy something or sign up for a service, be extra careful. The person who made the video might not have your best interests in mind.

Pushing Services on TikTok

Users are not only consuming entertaining content, but they are taking financial advice. And with 47% of users being under the age of 30 (The Social Shepherd), the platform is making it easy for younger audiences to learn about different topic areas.

Out of the lot, 47% of TikTok creators were found trying to push services to make money. Mainstream influencers, including Kim Kardashian, Jake Paul and Soulja Boy were also previously accused of promoting cryptocurrencies to their millions of fans without disclosing payments received.

The Risk of Misleading Crypto Videos

The United States Securities and Exchange Commission forced Kim Kardashian to pay $1.26 million in penalties for the promotion of EthereumMax (EMAX).

While TikTok influencers have a smaller reach than their mainstream counterparts, the potential financial risk for unwary investors remains equally high.

The research also found that 1 in 3 misleading videos on TikTok mention Bitcoin. Moreover, videos on TikTok sporting popular crypto-related hashtags — such as crypto, cryptok, cryptoadvice, cryptocurrency, cryptotrading and cryptoinvesting — have cumulatively churned over 6 billion views.

Viewers often oversee the ill-intent of their favorite influencers and end up trusting their content purely based on the 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.

The Legal Consequences of Promoting Unregistered Securities

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.

“This is a classic example of a centralized exchange, which is promoting the sale of an unregistered security,” read the lawsuit filed by the Moscowitz Law Firm and Boies Schiller Flexner.

As Cointelegraph reported, the lawsuit alleges that “millions” of people could be eligible for damages.

What is a ‘misleading video’ and why are disclaimers important?

In the study, the researchers used a specific set of criteria to determine whether a video was misleading or not. One of the criteria was the presence of a disclaimer. The purpose of the disclaimer was to make it clear to viewers that the information presented in the video was the creator's personal opinion and not expert guidance.

The researchers believed that a disclaimer was necessary because many TikTok users are young and inexperienced in investing. Without a disclaimer, viewers might assume that the information presented in the video is trustworthy and reliable, which could lead them to make unwise investment decisions.

The disclaimer would encourage users to conduct their own research, seek expert advice, and bear in mind that past market trends do not guarantee future results. By doing so, viewers can focus on risk management rather than price predictions when they invest in cryptocurrencies.

In addition to the disclaimer, videos were also deemed misleading if they encouraged users to invest in crypto assets or implied a guaranteed return on investment. This type of content is particularly dangerous because it can lead viewers to make impulsive decisions without fully understanding the risks involved.

Overall, the criteria used to determine whether a video was misleading or not was designed to protect viewers from inaccurate or potentially harmful information. By requiring a disclaimer and avoiding content that encourages investment or promises returns, TikTok users can stick to a long term plan for their finances.

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