Tencent Faces Possible Record Fine for Anti-Money-Laundering Violations

Chinese technology giant Tencent is facing a potential record fine for violations of some central bank regulations by its WeChat Pay mobile network, as Beijing toughens its regulations for fintech platforms, WSJ reported Monday, citing people familiar with the matter. From a report: Financial regulators recently discovered that WeChat Pay had flouted China's anti-money-laundering rules and had lapses in compliance with "know your customer" and "know your business" regulations, among other things, some of the people said. Tencent's ubiquitous mobile payments network was also found to have allowed the transfer and laundering of funds with illicit transactions such as gambling, the people added. For WeChat Pay, "know your customer" and "know your business" procedures mean it must verify the identities of users and merchants transacting on its platform and the source of funds for those transactions. The People's Bank of China, the country's central bank, uncovered the breaches during a routine inspection of WeChat Pay that concluded in late 2021, the people familiar with the matter said. The size of the fine is still under deliberation and it could be at least hundreds of millions of yuan, some of the people said. That would be much larger than the fines regulators typically imposed on nonbank payment companies for anti-money-laundering rule violations in the past.

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