"The CapitalWatch report, titled "The Southeast Asian Money Laundering Syndicate's NASDAQ 'Laundromat'," focuses on AppLovin's capital structure and operations. It accuses primary shareholder Hao Tang and his network of injecting illegal funds into the company while evading anti-money laundering rules. The document links these funds to about 6.67 billion yuan in illegal proceeds from China's Tuandaiwang platform, a collapsed peer-to-peer lending site, and revenues from Southeast Asian scams like "pig-butchering" crypto frauds."
"CapitalWatch describes a "Mobius Loop" system where criminal groups pay AppLovin for ads via intermediaries, converting dirty money into legitimate revenue. This involves the company's AXON algorithm and Array software, with payments routed through apps like Cambodia's WOWNOW. The report also claims Hao Tang partnered with Chen Zhi, leader of Cambodia's Prince Group, which the U.S. Justice Dept. has tied to telecom fraud and human trafficking."
AppLovin shares plunged about 15% over three trading sessions and fell another 8% in premarket to near $528 after allegations of involvement in money laundering. CapitalWatch alleges major shareholders used AppLovin's advertising tools to launder billions from China and Southeast Asia, linking funds to roughly 6.67 billion yuan from Tuandaiwang and revenues from pig-butchering crypto frauds. CapitalWatch describes a "Mobius Loop" where intermediaries buy ads to convert illicit funds into revenue, citing AXON and Array software and apps like WOWNOW. CapitalWatch names ties between Hao Tang and Chen Zhi of Cambodia's Prince Group. Prior short-seller claims and an SEC probe into data practices add regulatory pressure.
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