AUSTRAC asked to eye TikTok
AUSTRAC has been asked to investigate TikTok over money laundering concerns.
James Paterson, the Opposition Home Affairs spokesman, has formally written to AUSTRAC, urging an investigation into TikTok following reports that the platform may have been used for money laundering, initially detected in Turkiyë.
This request was driven by TikTok’s own admission of discrepancies in its payment screening processes to Irish regulators, which it had previously misrepresented.
TikTok, owned by the Chinese company ByteDance, claims it is not under any control by the Chinese Communist Party.
Despite this, concerns persist due to the nature of its ownership, which Senator Paterson believes could pose “national security and privacy risks to our country.”
His concerns are amplified by allegations that money routed through TikTok may have reached proscribed terrorist groups, an issue that first came to light through a Turkish news report in 2022.
TikTok operates a digital gifting system that allows users to send virtual items, which can be converted into real money.
This feature has become particularly popular among the platform's predominantly younger audience, with some users earning substantial amounts from these gifts.
However, this system came under scrutiny when Turkish authorities detected significant sums being transferred to accounts suspected of links to terrorist activities.
Following this, HSBC closed multiple TikTok accounts due to insufficient controls, a situation further complicated by subsequent inquiries from Irish banking regulators.
In response to these issues, a TikTok spokesperson has reassured the public, stating; “Australians can be reassured that TikTok takes its legal obligations seriously, and has robust controls in place to ensure compliance with those obligations.”
She also noted that TikTok had not been contacted by Australian regulators regarding these allegations.
AUSTRAC has acknowledged receiving Paterson's letter but has not confirmed whether an investigation will be launched.
This incident adds to a string of challenges for TikTok, which has faced increased scrutiny in Western countries. Notably, a bill in the United States proposes forcing ByteDance to sell TikTok unless it wants to face a ban, although no similar legislation is currently being pursued in Australia.
TikTok is also under investigation by the Office of the Australian Information Commissioner over potential breaches of privacy rules concerning data collection practices.