The British regulator has received a letter alleging that TikTok users can indirectly exchange the platform’s virtual currency for fiat money through a special reward system. Users can purchase TikTok coins and use them to send “gifts” to content creators. These “gifts” can then be converted and cashed out. Thus, TikTok simplifies the transfer of money to companies providing financial services, and also organizes the exchange of crypto assets for fiat and vice versa, the letter states.
It is unclear how TikTok coins are classified as cryptocurrencies since they are labeled as “virtual coins.” Financial News has not disclosed the identity of the person who filed the complaint with the FCA. He is only referred to as a “former compliance officer at a leading private bank and asset manager.”
The complainant claims that TikTok is not registered with the FCA, so there is a risk that criminals will use the service for illegal activities, in violation of anti-money laundering (AML) rules. The author of the letter insists that TikTok register with the agency and ensure compliance with FCA requirements to combat terrorism.
In 2021, TikTok banned the advertising of cryptocurrencies on its platform, however, many crypto bloggers using the platform continue to lure users into dubious crypto schemes. Last week, TikTok launched a new clicker game, SonicX, based on the Solana blockchain.
Source: Bits
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