TikTokhasbeenaccusedoffunctioningasanunlicensedcryptocurrencyexchangeintheUnitedKingdom.
AlettersenttotheFinancialConductAuthority(FCA)byaformercomplianceconsultantforthecryptocurrencyplatformincludesseveralconcernsregardingtheoperationofthevirtualcurrencysegment.TheletteralsoimpliesthatTikTokallowsuserstoconvertitsvirtualcurrencytorealmoney,whichmakesitfallunderanti-moneylaunderinglaws.
Accordingtotheletter,TikTok’srewardsprogramhelpsintransferringfundstomoneyservicebusinesses.TheTikTokCoinsareboughtbyusersandareusedtosendgiftstothecreatorsofthecontent.Thesegiftsarethenexchangedfor“diamonds”thatcanbeexchangedforfiatcurrency.Asperthecomplianceconsultant,TikTokisessentiallybarteringcryptoassetsforcashwithoutnecessaryFCAregistration.
TheletterfurtherurgestheFCAtoregulateTikTokunderanti-moneylaundering(AML)andterroristfinancinglaws.Itrevealsthatthepresentstructureoftheplatformisproblematic,especiallywithregardtomonetarytransfersthatcanbypassrulesandregulations.IftheFCAstepsin,itcanresultinscrutinizingTikTok’sfinancialtransactions,particularlyitsvirtualcurrencytransactions.
Furthermore,theletterincludesconcernsaboutTikTok’sAMLmeasures.ItpointsoutthatintheabsenceofproperFCAregistration,theplatformmaybeexposedtomoneylaunderingandotherfrauds.
GlobalinvestigationstargetTikTok’sfinancialpractices
TheFCAoverseesthefinancialcompaniesintheUKtomakesuretheyfollowlawsmeanttopreventmoneylaunderingandterroristfinancingactivities.TheabsenceoftheFCAregistrationofTikTokhasgeneratedconcernsregardingthefirm’scapacitytomanagetransactionscomprehensively.Inresponsetotheseallegations,TikTokisalsosaidtobeincreasingitscomplianceteamtohandletheseissues.
TheallegationsareinlinewithearlierprobesthathavebeendirectedatTikTokglobally.InAustralia,theAustralianTransactionReportandAnalysisCentre(AUSTRAC)isprobingintotheplatformasitsuspectsthesametobeinvolvedinmoneylaundering.
Moreover,TikTokhasbeenbannedandchallengedlegallyinseveralcountries,includingtheUnitedStates.Thesecontroversieshavebeenoccasionedbyquestionsonuserprivacyanddataprotection.However,somepoliticians,suchastheU.S.presidentialcandidateRobertF.KennedyJr.,havecomeoutindefenceofTikTokagainstthebans.
InMarch,ItalyfinedthreeTikTokunitsforinsufficientchecksoncontentthatmightbedangerousforchildrenorothervulnerablesubjects.Inrelatednews,TikTokissaidtobeplanningoncuttingitsworkforcebyhundredsofemployees.
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