Business
Tencent’s WeChat Pay Hong Kong Slapped with HK$875,000 Fine by HKMA for Negligence in Customer Due Diligence
The Hong Kong Monetary Authority (HKMA) has imposed a fine of HK$875,000 on Tencent's WeChat Pay Hong Kong for not conducting proper due diligence. The investigation by the HKMA spanned five years until October 2021, throughout which WeChat Pay was found lacking in putting in place sufficient safeguards and controls.
The Hong Kong Monetary Authority (HKMA) announced on Friday that they have levied a penalty of HK$875,000 (US$112,205) on Tencent Holdings' local division, WeChat Pay Hong Kong. The fine was due to the company's failure to properly execute procedures for customer due diligence.
The Hong Kong Monetary Authority (HKMA) enforced disciplinary measures on WeChat Pay after conducting an inquiry spanning over five years, from August 2016 to October 2021. Throughout this period, the service provider didn't establish sufficient and suitable checks in relation to customer due diligence.
The shortcomings primarily pertained to protocols for preventing money laundering and terrorist financing via stored value services, as per an announcement from the HKMA.
The Hong Kong Monetary Authority (HKMA) has stated that WeChat Pay failed to evaluate the potential hazards after receiving alerts from law enforcement to carry out a thorough examination on mobile numbers suspected to be involved in scams, and to verify if these numbers were associated with their clients.
The firm received 1,827 data points related to 500 accounts. Out of this, 98 were linked to 84 clients that were later reported to the Joint Financial Intelligence Unit (JFIU) of the Hong Kong government.
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