These days, many people are watching videos (or broadcasts) introduced by creators who are active on social media platforms such as YouTube and TikTok and have gained immense popularity. There are many different types of creators. However, it is said that creators must go through ‘this process’ in order to earn profits. What could it be? Today, we will introduce the essential procedures that creators must follow to receive profits and discuss the issues that arise if these steps are skipped.
In Israel, two NFT creators were arrested on charges of tax evasion and money laundering for failing to report $2.2 million in sales in 2021. They neglected to report millions of U.S. dollars received in exchange for selling digital artworks.
The Problems Arising from Illegal Money Laundering
Nowadays, supporting creators as a way to express fan sentiment has become common. However, there is also a darker side: this can be misused for illegal activities. As online broadcasting platforms diversify, sponsorship methods are also becoming more varied, and cases of money laundering violations are increasing.
Money laundering can violate anti-money laundering laws when sponsorship items (Virtual Gifts) are exchanged for cash. Individual service users often have difficulty detecting such illegal activities. Additionally, money laundering may involve transferring illegally obtained funds to a specific creator under the guise of 'donations' and then colluding with the creator to reclaim the funds or settle only a portion. Another method includes purchasing NFTs created by oneself on NFT marketplaces.
The Consequences of Illegal Money Laundering
Because of these methods, the risk of users of internet broadcasting platforms unintentionally becoming involved in crimes cannot be completely ruled out. If involved in illegal money laundering, creators who launder funds, platform service users, and companies will all suffer negative consequences as public trust declines.
Why Creators and Other Monetized Content Platforms Need to Verify Their Identity
To avoid being penalized for simply supporting a creator as a fan, it is essential to understand money laundering. Therefore, creator platforms require individual identity verification procedures. This process is necessary not only to prevent illegal activities but also to ensure the fair distribution of profits.
Creators must complete the verification process as quickly as possible to receive payments promptly without any revenue issues. In this regard, TikTok requires identity verification for any withdrawals or coin exchanges. Once the identity verification is completed, the platform offers benefits such as unlimited coin recharges, certification mark displays, and cashback events.
What Should We Do to Prevent Illegal Money Laundering?
So, what steps can be taken to prevent illegal money laundering?
Strengthening Identity Verification (eKYC)
Platforms must require non-face-to-face identity verification (eKYC) when processing profit payments or handling large donations. Through ID verification and facial recognition, platforms can accurately identify sponsors and revenue recipients, preventing issues like anonymous donations or illegal accounts.
Application of a Transaction Monitoring System
An AML (Anti-Money Laundering) system must be implemented to detect suspicious transactions in real time. By identifying patterns such as repeated large donations or frequent transactions between the same accounts, platforms can proactively prevent money laundering.
Are there services available that combine these two key solutions?
ARGOS ID Check Service: Strong in eKYC and AML!
ARGOS' ID check service recognizes ID cards from over 200 countries worldwide and provides facial recognition technology with an accuracy of over 99.996%. It is the optimal solution for preventing money laundering and ensuring compliance with international regulations, while maximizing corporate operational efficiency through fast and secure identity verification.
In addition, ARGOS introduces the latest Liveness technology to prevent face and document forgery, delivering even more secure customer authentication.
ARGOS ID check can integrate the system in just one day and enhances the user experience with various advanced features such as:
User management technology
Duplicate user detection
Abnormal IP detection
ARGOS SCORE
By applying identity verification, you can block ID forgery and money laundering at the source, preventing damages related to illegal funds.
An integrated solution like ARGOS is the most effective way to address these challenges.