CoinVoice has recently learned that according to Cryptonews, the short video app TikTok is under scrutiny for allegedly operating in a similar manner to a cryptocurrency exchange in the UK. It is reported that a compliance expert has issued a warning to the UK Financial Conduct Authority (FCA), recommending that TikTok be checked for money laundering and terrorist financing. The expert highlighted that the virtual tokens on TikTok may be indirectly exchanged for real currency through its creator program, which is worrying.
The scrutiny stems from TikTok's virtual currency system, TikTok Tokens. Users can buy tokens with real money and give them away on the platform or in live broadcasts. They also have the possibility to exchange these tokens back for cash. This process is similar to cryptocurrency trading. The system has raised regulatory concerns as cryptocurrency businesses face strict regulations. Critics believe that TikTok's handling of virtual currencies may be subject to the same scrutiny as cryptocurrency platforms. In addition, this cryptocurrency-like transaction also raises concerns about the security of users' financial data, especially given geopolitical sensitivities.
The letter reportedly reads: âTikTok provides money transmission services to money service businesses through its rewards program and exchanges crypto assets for currency or currency for crypto assets, or makes arrangements for or in connection with such exchanges.â Neither TikTok nor the FCA responded to Cryptonewsâ request for comment by press time. [Original link]
