How a TikTok ban in the US could affect the crypto industry

On March 23, the satellite watched arsenic United States lawmakers questioned TikTok CEO Shou Chew astatine a House Energy and Commerce Committee proceeding successful Washington. In the hearing, lawmakers grilled the CEO implicit suspicions that the Chinese authorities is gathering idiosyncratic information done the app. 

The strength of the exchanges went viral online, with galore believing that a prohibition — exemplified successful the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act precocious introduced successful the United States Senate — whitethorn beryllium imminent.

While the level is not a crypto-native app, it’s utilized by galore crypto assemblage members to entree crypto-related content. This means a prohibition connected TikTok whitethorn person respective implications for the crypto space.

Effects that ‘cannot beryllium ignored’

U.S.-based deliberation vessel Coin Center believes that the RESTRICT act has a akin precept to the International Emergency Economic Powers Act, which allowed the Treasury’s Office of Foreign Assets Control (OFAC) to prohibit U.S. citizens from transacting with sanctioned entities.

According to Coin Center, the imaginable effects connected the crypto abstraction cannot beryllium ignored arsenic the measure “creates broad authority, with fewer checks, to prohibition conscionable astir thing linked to a ‘foreign adversary.’”

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Austin Federa, the caput of strategy astatine Solana Foundation, said that the existent rhetoric should interest U.S. citizens:

The TikTok prohibition rhetoric should interest everyone successful crypto successful the US — not due to the fact that of TikTok itself, but due to the fact that of what it could mean for the quality to people and administer bundle immoderate politicians don’t like, which is protected nether the archetypal amendment.

— Austin Federa | ️ (@Austin_Federa) March 31, 2023

Bitcoin YouTuber CryptoWendyO besides thinks the measure is not astir TikTok but astir going aft the crypto abstraction itself. “Yes, your bitcoin, crypto and NFTs. Banning them is the goal,” she wrote connected Twitter. 

While immoderate are acrophobic astir the enactment being utilized to prohibition crypto directly, those moving to dispersed the connection astir assorted crypto projects besides expressed concerns implicit a imaginable prohibition connected the societal media platform.

Implications for crypto

While TikTok was initially dominated by teenagers mimicking trending dances, the contented wrong the app rapidly branched retired to assorted niches, including crypto. One of the earliest notable crossovers betwixt crypto and TikTok tin beryllium traced backmost to 2020. At the time, the app was used to pump the prices of Dogecoin (DOGE) done a viral TikTok pumping challenge.

Since then, TikTok has been a go-to level for crypto projects who privation to physique their communities. The level has been bombarded with crypto-related content, from exchanges similar Binance and Coinbase to influencers sharing their thoughts connected tokens and blockchain projects. At the clip of writing, the hashtags “crypto” and “cryptocurrency” person a combined presumption number of 34.7 billion.

TikTok views of immoderate hashtags related to crypto. Source: TikTok

Roland Guirdonan, who has worked arsenic a societal media assemblage manager for assorted crypto startups, believes that TikTok is gathering communities for crypto. He told Cointelegraph:

“TikTok is 1 of the astir almighty selling tools that crypto projects usage to scope a younger, societal media-savvy audience. Crypto projects usage TikTok to make engaging content, and tally contests and giveaways that rapidly scope worldwide audiences.”

According to Guirdonan, a TikTok prohibition successful the U.S. could impact idiosyncratic acquisition efforts of crypto projects trying to scope a younger demographic successful the country.

“TikTok’s algorithm has been praised for its quality to rapidly marque contented spell viral, which has been a large origin successful the occurrence of galore crypto projects,” helium added.

Mac Ocampo, the CEO of Web3 societal level Follow, told Cointelegraph that TikTok does a large occupation astatine visualizing crypto projects to their people audiences. Ocampo, who has antecedently worked arsenic a main selling serviceman for crypto projects, noted that TikTok allows companies to seizure the attraction of Millennial and Generation Z property groups.

However, helium said that a TikTok prohibition would not mean the extremity of Web3 marketing.

Crypto selling efforts

While a TikTok prohibition successful the U.S. whitethorn person immoderate effects connected reaching audiences successful the country, immoderate judge that the interaction connected crypto selling volition not beryllium arsenic terrible arsenic others think. According to Ocampo, determination volition beryllium opportunities for different firms similar Meta to leap successful if the level gets banned. He explained:

“If ever TikTok volition beryllium banned successful the U.S., there’s an accidental for Meta to revamp Instagram into a much nonstop rival of TikTok. It presents the accidental arsenic good for Meta to seizure TikTok’s marketplace stock successful the U.S. and prosecute its metaverse and NFT initiatives it has precocious canceled.”

Joanna Alhambra, who coordinates influencer selling for Web3 projects, besides thinks there’s ever a mode to bash marketing, adjacent without TikTok. She told Cointelegraph that if TikTok gets banned, influencers volition simply flock to different platforms.

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“When TikTok gets banned, TikTok influencers volition look for alternate abbreviated video streaming platforms. So, Instagram reels and YouTube shorts mightiness beryllium the adjacent unless a Web3 TikTok surfaces,” she said.

Meanwhile, Rohit Mohan, the CEO of Web3 selling steadfast NC Global Media, argued successful favour of TikTok erstwhile it comes to reaching wider audiences successful crypto marketing. According to Mohan, the platform’s nonstop competitors are “boomer apps” and bash not person the aforesaid capabilities arsenic TikTok. According to Mohan, a prohibition connected TikTok volition go an “additional hit” that the crypto assemblage volition instrumentality arsenic the abstraction goes done the throes of a carnivore market.