TikTok faces allegations of operating a cryptocurrency exchange business in the UK

ChainCatcher news, according to Cryptonews, the short video application TikTok is under scrutiny for allegedly operating in the UK in a manner similar to cryptocurrency exchanges. It is reported that a compliance expert has warned the UK's Financial Conduct Authority (FCA), suggesting that TikTok undergo checks for money laundering and terrorist financing. The expert emphasized that the virtual tokens on TikTok could potentially be indirectly exchanged for real currency through its creator program, which is concerning.

This scrutiny stems from TikTok's virtual currency system—TikTok tokens. Users can purchase tokens with real money and gift them on the platform or during live streams. They may also have the option to exchange these tokens back for cash. This process is similar to cryptocurrency trading. Given the strict regulations surrounding cryptocurrency businesses, this system has raised regulatory concerns. Critics argue that TikTok's handling of virtual currency may face the same scrutiny as cryptocurrency platforms. Additionally, such cryptocurrency-like transactions have raised concerns about the security of users' financial data, especially considering the geopolitical sensitivities.

It is reported that the letter stated: "TikTok provides funding transfer services for money service businesses through its rewards program and facilitates the exchange of crypto assets for currency or currency for crypto assets, or makes arrangements for such exchanges." As of the time of publication, neither TikTok nor the FCA has responded to Cryptonews' request for comment.