TikTok! Social Media Money Laundering Conduit?

In February 2024, the Utah Division of Consumer Protection filed a lawsuit against TikTok Inc., alleging deceptive practices, including concerns about money laundering through the platform’s gifting feature.

TikTok allows users to purchase digital gifts using real money. These gifts can be sent to creators during live streams and then redeemed for real currency. This system creates a flow of funds that can be misused by criminals to launder money.

Key Takeaways:

• TikTok’s gifting feature can be used for the placement and layering of illicit funds.
• The platform profits from these transactions and lacks transparency and AML oversight.
• Banks and financial institutions are exposed when laundered funds flow into their systems.
• Regulation is necessary to close these gaps and require AML compliance from platforms like TikTok.
• User protection depends on stricter platform controls, including identity verification, transaction monitoring, and reporting obligations.

Read full post here: TikTok! Social Media Money Laundering Conduit