Tencent to face a record fine for money laundering


Tencent Holdings Ltd (HKG: 0700) could face an unprecedented fine for violating the anti-money-laundering regulations laid out by the People’s Bank of China, the Wall Street Journal reported on Monday.

Here’s what Tencent’s WeChat Pay did wrong

Tencent’s WeChat Pay failed to comply with the regulation that binds it to verify not only the identities of transacting users and merchants on its platform but also the source of their funds.

Consequently, evidence of “illicit transactions” were uncovered during PBOC’s routine inspection of the mobile payments and digital wallet services. Citing anonymous sources, the WSJ report said the potential fine on Tencent for the violation could amount to hundreds of millions of yuan at least.

Both Tencent and the central bank of China are yet to make an official comment on the news.

China’s campaign against money laundering

The report comes more than a month after China launched a three-year campaign against money laundering.

It’s also been tightening regulations around anti-trust and data protection for its technology companies, particularly the ones like Alibaba, Meituan, and Tencent Holdings that are fairly active in the financial space as well.

Also on Monday, the U.S. listed Chinese stocks spiralled as a new wave of COVID infections in China sparked a broader sell-off in Asia.

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