On March 23, the world watched as US lawmakers questioned TikTok CEO Shou Chew at a House Energy and Commerce Committee hearing in Washington. At the hearing, lawmakers questioned the CEO about 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 the Emergency Restriction of Security Threats Endangering Information and Communications Technology (RESTRICT) Act recently filed in the United States Senate, may be imminent.
While the platform is not a native cryptocurrency app, many members of the cryptocurrency community use it to access cryptocurrency-related content. This means that the TikTok ban may have several implications for the crypto space.
Effects that 'cannot be ignored'
US-based expert coin center believes that the RESTRICT has a provision similar to the International Emergency Economic Powers Act, which allowed Treasury's Office of Foreign Assets Control (OFAC) to bar US citizens from transacting 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 almost anything tied to a 'foreign adversary'."
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Austin Federa, chief strategist at the Solana Foundation, said that the current rhetoric should concern American citizens:
The TikTok ban rhetoric should concern everyone in crypto in the US, not for TikTok itself, but for what it could mean for the ability to publish and distribute software that some politicians don't like, which is protected by the first amendment.
โ Austin Faith | ๏ธ (@Austin_Federa) March 31, 2023
Bitcoin YouTuber CryptoWendyO also believes that the bill is not about TikTok but about going after the crypto space itself. โYes, your bitcoin, crypto and NFT. Banning them is the goal,โ he wrote on Twitter.
While some are concerned about the law being used to ban cryptocurrencies outright, those working to spread the word about various cryptocurrency projects have also raised concerns about a potential ban on the social media platform.
Implications for cryptography
While TikTok was initially dominated by teens imitating trendy dances, the content within the app quickly expanded into various niches, including crypto. One of the first notable crossovers between crypto and TikTok dates back to 2020. At the time, the app was used to raise prices from Dogecoin (DOGE) through a viral TikTok pump challenge.
Since then, TikTok has been a go-to platform for crypto projects that want 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 view count of 34.7 billion.
Roland Guirdonan, who has worked as a social media community manager for various cryptocurrency startups, believes that TikTok is building communities for cryptocurrency. He told Cointelegraph:
โTikTok 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 audiences around the world.โ
According to Guirdonan, a TikTok ban in the US could affect the user acquisition efforts of 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 a major factor in the success of many crypto projects," he added.
Mac Ocampo, the CEO of social platform Web3 Follow, told Cointelegraph that TikTok does a great job of visualizing crypto projects for its target audience. Ocampo, who previously worked as a marketing director for crypto projects, noted that TikTok allows companies to capture the attention of the Millennial and Generation Z age groups.
However, he said that 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 in 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 like Meta to participate if the platform is banned. He explained:
โIf TikTok is ever banned in the US, Meta has an opportunity to revamp Instagram and make it a more direct rival to TikTok. It also presents the opportunity for Meta to capture TikTok's market share in the US and continue its recently canceled metaverse and NFT initiatives."
Joanna Alhambra, who coordinates influencer marketing for Web3 projects, also believes that 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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โWhen TikTok is banned, TikTok influencers will look to alternative short video streaming platforms. So Instagram reels and YouTube shorts could be next, unless a Web3 TikTok comes along,โ he said.
Meanwhile, Rohit Mohan, CEO of marketing firm Web3 NC Global Media, argued in favor of TikTok when it comes to reaching broader audiences in crypto marketing. According to Mohan, the platform's direct competitors are "boomer apps" and don't have the same capabilities as TikTok. According to Mohan, the TikTok ban will become an โadditional blowโ to the crypto community as the space goes through the throes of a bear market.
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