Experts Warn TikTok May Function as an Unregulated Crypto Exchange

A compliance expert has alerted the UK’s Financial Conduct Authority (FCA) that TikTok’s virtual currency system may be operating as a crypto exchange without proper registration.

The letter to the FCA suggests that TikTok Coins, used within the app for user transactions and creator rewards, might fall under the regulator’s crypto asset regulations.

Users buy these coins with real money to send digital gifts to content creators, essentially converting fiat into a form of digital asset.

The expert argues that TikTok’s system resembles a form of virtual asset exchange, raising concerns about the platform’s compliance with anti-money laundering regulations. TikTok is not registered with the FCA as a digital asset service, which could indicate a gap in monitoring the origins of funds used in its economy.

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The FCA has been ramping up oversight in the crypto sector, only approving a fraction of applications from digital asset firms while pursuing enforcement actions.

The compliance concerns highlight potential vulnerabilities in TikTok’s approach to user verification and financial transparency, potentially putting the platform at risk for money laundering issues.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.