TikTok ban: Can crypto survive without TikTok’s influence?

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Could it be that TikTok, the social media app debuted in September 2016, may encounter a prohibition in the United States. What implications might this have on the cryptocurrency market?

Beginning on January 19th, the prohibition of TikTok in the United States will commence under the Protecting Americans From Foreign Adversary Controlled Applications Act. This law forbids app stores, primarily managed by Google and Apple, as well as web-hosting services, from offering or facilitating TikTok.

In 2023, the social media app that generated $6.2 billion in ad revenue within the United States has been ordered by the Supreme Court to either dispose of the app or risk being banned.

The legislation justifies the prohibition by pointing out potential threats to national security, expressing concern that the Chinese administration could potentially gain access to information about TikTok users.

On the other hand, President-elect Donald Trump, known for his pro-crypto stance, is exploring ways to overturn the ban. Trump has gone so far as to file a petition to influence TikTok’s destiny. Likewise, Senators like Ed Markey have expressed opposition to the ban as well.

On January 10th, the Supreme Court debated the case orally, and it’s expected that they will issue their verdict prior to the January 19th deadline.

Based on the result, TikTok may carry on operating under its current U.S. ownership, or ByteDance, TikTok’s parent company, might need to sell off their stake in order to adhere to a fresh regulation.

Crypto culture on TikTok

In October 2024, the UK’s Financial Conduct Authority voiced apprehensions about TikTok’s virtual gifting mechanism. Through TikTok, users can buy TikTok Coins, which they then use to gift creators, as detailed in Financial News.

TikTok’s virtual currency, known as Coins, were exchanged for a new form called “diamonds,” which could later be withdrawn, much like cryptocurrency transactions. Yet, the Financial Conduct Authority (FCA) has voiced concerns about the potential dangers associated with unregulated crypto activities, encompassing money laundering and insufficient consumer protection.

On another occasion, TikTok and cryptocurrency have collaborated before. Specifically, in December 2024, Sonic – a gaming-focused blockchain built on Solana (SOL) – opted to distribute its SONIC tokens via TikTok to users who joined through the social media platform.

Sonic developed SonicX game specifically within TikTok, aiming to mirror the achievement of mini-apps established on the Toncoin (TON) blockchain within Telegram. The game attracted more than 2 million users via TikTok.

According to The Drum, many social media marketers have employed TikTok as a platform to rekindle curiosity about cryptocurrencies. This is because TikTok offers a vast area for generating content that breaks down complex concepts into easily understandable forms, captivating a tech-savvy youth audience.

Moreover, back in 2020, the popular “#DogecoinTikTokChallenge” was initiated. This saw notable crypto personalities boosting the value of Dogecoin (DOGE) by approximately 20% within a week.

Could the ban impact crypto?

According to a message from Alejandro Zambrano to crypto.news, although it’s unfortunate, a potential TikTok ban in the U.S. might not significantly impact the cryptocurrency market.

According to Zambrano, who holds the position of Chief Market Strategist at ThinkMarkets – a worldwide online brokerage company providing services for forex, contracts for differences (CFDs), and cryptocurrencies – it was revealed that TikTok has been restricting content related to cryptocurrencies for quite some time.

TikTok has been limiting crypto-related content for a number of years, which means its shutdown doesn’t have much impact on the industry. For example, significant cryptocurrency influencers who once used TikTok found they weren’t getting many views, so they stopped posting there. Additionally, today’s popular TikTok accounts attract far fewer views for similar crypto content compared to top influencers on other platforms.

Alejandro Zambrano, Chief Market Strategist at ThinkMarkets

In July 2021, TikTok updated its content policy with the goal of firmly disavowing deceptive financial advice and risky investment strategies. This update encompassed banning various financial services, such as cryptocurrencies, to protect users from potential harm.

If TikTok were to be fully banned in the U.S., it probably wouldn’t cause a significant disruption in the cryptocurrency market since a content ban has already been enforced.

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2025-01-15 14:14