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.
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.
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.
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 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.
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Related: How a TikTok ban in the US could affect the crypto industry
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.