The post TikTok Coins system may classify as a crypto exchange, expert warns FCA appeared on BitcoinEthereumNews.com.

Key Takeaways TikTok’s coin system could be classified as a crypto exchange activity. The FCA has not registered TikTok as a digital asset exchange. TikTok could be acting as a digital assets exchange in the UK, a compliance expert has told the Financial Conduct Authority (FCA), according to a report from Financial News.  A letter sent to the FCA, and reviewed by the publication, suggests that TikTok’s virtual coin system and creator rewards program could qualify as crypto asset-related activities under the regulator’s framework. TikTok’s virtual economy is based on a coin system, called ‘TikTok Coins’, an in-app currency, allowing users to participate in various interactions and support content creators. Users can purchase TikTok Coins with real money and buy virtual gifts to send to their favorite creators. The compliance professional argues that this system effectively enables the exchange of virtual assets for fiat currency, which should subject TikTok to the FCA’s anti-money laundering and counterterrorism financing regulations. TikTok has not registered with the FCA as a money service business or digital asset exchange, according to the regulator’s list of approved firms.  The letter sent to the FCA claims that this lack of registration creates a risk of inadequate oversight regarding the origin of funds used to purchase virtual coins.  The FCA’s scrutiny of digital assets has intensified, with the regulator investing in staff and resources to monitor the sector. By October 2024, it had approved only 48 out of roughly 500 crypto firm applications, reflecting its heightened oversight.  This commitment was further underscored in July when the FCA fined Coinbase’s UK business for failing to meet money laundering standards. The compliance expert highlighted risks from a “lack of transparency” in identifying user accounts, such as those with minimal information, increasing TikTok’s vulnerability to illicit activities like money laundering. These…

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Filed under: News - @ October 15, 2024 8:15 pm