How a TikTok ban in the US could affect the crypto industry
On March 23, the world watched as US lawmakers questioned TikTok CEO Shou Chew at a House Energy and Commerce Committee hearing in Washington. In the hearing, lawmakers grilled the CEO over suspicions that the Chinese government is collecting user data through the app.
The intensity of the exchanges went viral online, with many believing that a ban — exemplified by legislation to limit the rise of security threats such as the Risk Information and Communications Technology (RESTRICT) Act recently introduced in the US Senate — could be imminent.
Although the platform is not a crypto-native app, it is used by many crypto community members to access crypto-related content. This means that a ban on TikTok could have several implications for the crypto space.
Effects that ‘cannot be ignored’
The US-based think tank Coin Center believes that the RESTRICT Act has a similar provision to the International Emergency Economic Powers Act, which allowed the Treasury’s Office of Foreign Assets Control (OFAC) to prohibit US citizens from trading with sanctioned entities.
According to Coin Center, the potential effects on the crypto space cannot be ignored, as the bill “creates a blanket authority, with few checks, to ban just about anything related to a ‘foreign adversary.’
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Austin Federa, chief strategy officer at the Solana Foundation, said the current rhetoric should worry American citizens:
Bitcoin YouTuber CryptoWendyO also believes that the bill is not about TikTok, but about going after the crypto space itself. “Yes, your bitcoin, crypto and NFTs. Banning them is the goal,” she wrote on Twitter.
While some are concerned that the act was used to ban crypto outright, those working to spread the word about various crypto projects also expressed concerns over a potential ban on the social media platform.
Implications for crypto
While TikTok was initially dominated by teenagers imitating trending dances, the app’s content quickly branched out into different niches, including crypto. One of the earliest notable transitions between crypto and TikTok can be traced back to 2020. At the time, the app was used to pump the prices of Dogecoin (DOGE) through a viral TikTok pump challenge.
Since then, TikTok has been a go-to platform for crypto projects looking to build their communities. The platform has been bombarded with crypto-related content, from exchanges like Binance and Coinbase to influencers sharing their thoughts on tokens and blockchain projects. At the time of writing, the hashtags “crypto” and “cryptocurrency” have a combined impression figure of 34.7 billion.
Roland Guirdonan, who has worked as a social media community manager for various crypto startups, believes that TikTok is building communities for crypto. He told Cointelegraph:
“TikTok is one of the most powerful marketing tools that crypto projects use to reach a younger, social media-savvy audience. Crypto projects use TikTok to create engaging content, and run contests and giveaways that quickly reach a worldwide audience.”
According to Guirdonan, a TikTok ban in the US could affect user acquisition efforts by crypto projects trying to reach a younger demographic in the country.
“TikTok’s algorithm has been praised for its ability to quickly make content go viral, which has been an important factor in the success of many crypto projects,” he added.
Mac Ocampo, CEO of Web3 social platform Follow, told Cointelegraph that TikTok does a good job of visualizing crypto projects to its target audiences. Ocampo, who previously worked as a marketing manager for crypto projects, noted that TikTok allows companies to capture the attention of the Millennial and Generation Z age groups.
However, he said a TikTok ban would not mean the end of Web3 marketing.
Crypto marketing efforts
While a TikTok ban in the US may have some effects on reaching audiences in the country, some believe that the impact on crypto marketing will not be as severe as others think. According to Ocampo, there will be opportunities for other firms such as Meta to jump in if the platform is banned. He explained:
“If ever TikTok gets banned in the US, it’s an opportunity for Meta to revamp Instagram into a more direct rival of TikTok. It also gives Meta the opportunity to take TikTok’s market share in the US and pursue its metaverse and NFT initiatives which it has recently cancelled.”
Joanna Alhambra, who coordinates influencer marketing for Web3 projects, also believes there is always a way to do marketing, even without TikTok. She told Cointelegraph that if TikTok is banned, influencers will simply flock to other platforms.
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“When TikTok gets banned, TikTok influencers will look for alternative platforms for short video streaming. So, Instagram reels and YouTube shorts could be next unless a Web3 TikTok emerges,” she said.
Meanwhile, Rohit Mohan, CEO of Web3 marketing firm NC Global Media, argued for TikTok in reaching a wider audience in crypto marketing. According to Mohan, the platform’s direct competitors are “boomer apps” and do not have the same characteristics as TikTok. According to Mohan, a ban on TikTok will be an “extra hit” that the crypto community will take as the space goes through a bear market.
