Short-form video app TikTok is under scrutiny for allegedly operating like a crypto exchange in the UK.
A compliance expert alerted the Financial Conduct Authority (FCA), suggesting that TikTok undergo money laundering and terrorist financing checks. The expert highlighted concerns that virtual tokens on TikTok can be indirectly converted to real money through its creator program.
They can also potentially convert the coins back into cash. This process mirrors cryptocurrency transactions. This system has raised regulatory concerns as crypto businesses face strict oversight.
This scrutiny stems from TikTok’s virtual currency system, TikTok Coins. Users can purchase coins with real money and gift them on the platform or in livestreams.
TikTok Coins Trigger Concerns Over Crypto-Like Operations
Additionally, the crypto-like transactions raise concerns about user financial data security, especially given geopolitical sensitivities.
Critics argue that TikTok’s handling of virtual currencies could attract the same scrutiny as cryptocurrency platforms.
“TikTok via its rewards programme is facilitating money transmission to [money service businesses] and exchanging, or arranging or making arrangements with a view to the exchange of, cryptoassets for money or money for cryptoassets,” the letter reportedly says.
