TikTok referred to AML authorities after lying to regulators and links to terrorist funding.
15/04/2024
Social video site TikTok has been referred to Australia’s Anti-Money Laundering authority [AUSTRAC] after the company LIED to Irish regulators about gaps in its payments screening.
The Australian Opposition Home Affairs spokesman James Paterson wrote to AUSTRAC last week to urge it to investigate TikTok because of money laundering issues that first emerged in Turkey. A spokesman for AUSTRAC
- Confirmed it had received Senator Paterson’s letter but said the agency could not comment on “operational matters”. It is not obliged to pursue the senator’s referral.
- Said Australian law required companies sending money to identify and reduce the risk that their services could be used to facilitate money laundering and crime.
What has been found?
- TikTok operates a payments system that lets users give “gifts” in the form of digital gold to people streaming on the site that can be redeemed for real money.
- The system has become enormously popular among the site’s largely younger user base, with some people relying on gifts to generate thousands of dollars a week.
- But in 2022, a Turkish government news site reported that local authorities had found millions of dollars were being transferred via TikTok to accounts suspected to be linked to terrorist groups.
- That resulted in HSBC closing TikTok accounts after finding the platform had insufficient controls, which in turn prompted questions from Irish banking regulators who noticed large cash movements linked to the account closures.
- TikTok, according to US tech publication [The Information] that first reported the Irish connection, brushed off the transfers as usual business practice in early 2023 but later disclosed the real reason behind them.
Senator Paterson, a persistent critic of TikTok because its ownership structure places it under the potential direction of the Chinese Communist Party, said
- AUSTRAC should investigate.
- “TikTok’s national security and privacy risks to our country would be seriously compounded if any allegations are proven that the company’s platform has been implicated in counter-terrorism financing activities of a proscribed terrorist organisation under Australian law,”
Source
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