A former consultant raised this issue in a letter to the Financial Conduct Authority (FCA), expressing concerns that TikTok allows users to convert virtual currency into real money, which could breach anti-money laundering regulations.
The letter explains that users buy TikTok Coins to send gifts to content creators, which are then converted into "diamonds" and ultimately into fiat currency. The consultant argues that TikTok is facilitating cryptocurrency asset transactions for cash without being registered with the FCA.
The letter further urges the FCA to enforce compliance with anti-money laundering (AML) and counter-terrorism financing laws on TikTok, cautioning that money transfers via the platform might bypass existing regulations.
If the FCA takes action, TikTok’s financial operations, particularly those involving virtual currency, will come under close scrutiny.
Additionally, the letter questions TikTok’s anti-money laundering protocols, suggesting that the absence of FCA registration could open doors to money laundering and fraudulent activities.
The FCA oversees financial entities in the UK to prevent money laundering and terrorism financing. TikTok’s failure to register with the FCA has raised doubts about its ability to manage such transactions properly. In response, TikTok is reportedly bolstering its compliance team.
These allegations are in line with other international investigations. In Australia, AUSTRAC is also looking into TikTok for possible money laundering activities.
Moreover, TikTok is facing legal challenges in the United States, where privacy and data protection concerns have led to bans in several regions.
In March, TikTok was fined in Italy for failing to monitor harmful content targeted at children and vulnerable groups, and the company is also expected to lay off hundreds of employees in the near future.
