MOCA sounds TikTok alarm - Anti-corruption agency says popular app may be facilitating money laundering

It may not all taps and roses on TikTok, as the Major Organised Crime and Anti-Corruption Agency (MOCA) has raised serious concerns about the potential for the social media giant to become a breeding ground for money laundering.

"We are aware that TikTok, like many other social media platforms, has been increasingly exploited for illicit activities," the entity said.

MOCA's Cyber Investigations and Risk Management Unit has identified TikTok's popular "gifting" feature as a potential tool for criminals to "clean" illicit money, disguising dirty cash as legitimate earnings from content creators.

"Illicit actors could use stolen or laundered funds to buy coins and gift them to a friend or associate during a live stream. The recipient could then return the favour, gifting the coins back, making the illicit money appear as if it has been earned through legitimate means (like support for content creation)," MOCA said in an eye-opening response to a query from this newspaper..

While TikTok's gifting system is designed to let users send virtual tokens of appreciation to their favourite creators during live streams, the process has raised red flags for MOCA.

Viewers purchase virtual coins with real money, and these coins can then be used to send virtual gifts--ranging from cute roses and hearts to extravagant unicorns or dragons. The content creators, in turn, accumulate "diamonds," TikTok's virtual currency, which can later be converted into actual money through PayPal or other payment systems.

MOCA warns that this system could be exploited to launder illicit funds. By using stolen or fraudulent money to buy coins and send them to an associate, criminals could easily "clean" the money. The coins are then gifted back, and the original funds, once considered dirty, are now disguised as legitimate earnings from supporting content creators.

By cashing out gifts purchased with dirty money, MOCA said these funds have now been "washed and appear as legitimate earnings from TikTok's system".

MOCA's warning is not limited to money laundering. The agency has also identified TikTok as a platform increasingly exploited for a range of illicit activities. According to Major Basil Jarrett, MOCA's director of communications, the platform has been used to facilitate "sextortion" schemes, where criminals posing as influencers lure unsuspecting victims, sometimes minors, with promises of financial opportunities. These seemingly harmless interactions quickly escalate into abusive scams, demanding money or compromising material from the victims.

"We've seen cases where perpetrators, who may pose as influencers or legitimate users, initially promise opportunities like brand promotions or partnerships. But as these conversations develop, they escalate into sextortion scams," Jarrett explained.

"We're also aware of a variety of other scams, including car scams and house rental frauds, that are rampant on the platform."

MOCA has ramped up its efforts to combat online crime, with a particular focus on social media platforms. One of the agency's key strategies is collaboration with international law enforcement agencies to track and investigate illicit activities that span borders.

"We are committed to tackling online crime, including activities facilitated on platforms like TikTok," Jarrett said, underscoring MOCA's vigilance in the fight against digital fraud.

"Our global collaborations are essential to keeping pace with criminals who exploit these platforms to launder money and perpetrate scams."