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China: $2 Billion Channeled Through Bogus Ecommerce into Gambling

Tiffany Burroughs
Updated: 26 June 2023
2 min to read

According to The Financial Times, Chinese authorities state that roughly $2 billion annually is diverted through some of the nation’s biggest e-commerce sites before reaching offshore gambling sites.
China gambling

Gambling is strictly forbidden in China, yet online gambling suppliers have found a way of targeting Chinese citizens from out of the country. To bypass Chinese financial limitations, these offshore businesses have been utilizing phony e-commerce deals as a way to deposit funds into gambling accounts – a process called “transaction laundering” in the world of fintech. Specifically, gamblers would give money for nonexistent products to a fraudulent vendor and then would obtain an equivalent sum into their online betting account. To fight this practice, China is putting its emphasis on payments and on tracking down fake merchants who are utilizing well-known sites like Pinduoduo. Recently it was discovered that 600 million bogus tracking numbers have been used and circulated.

600 Million Fake Tracking Numbers

In August, police in Wuxi, a city located in the east of China, cracked down on an organization that had been operating 2,600 websites designed to falsify e-commerce deals through sending out vacant parcels. Additionally, the organization had been offering 600 million express shipment tracking numbers, which could be infused into courier services’ monitoring systems by personnel inside the company to create a false impression that the shipments had been delivered. This week, authorities declared that illegal gambling operators had infiltrated high-profile Chinese shopping venues, like Pinduoduo. This platform, with its 600 million customers, is the largest e-commerce and second-largest internet retail site on the planet. According to the Financial Times, aggrieved gamblers protested in front of Pinduoduo’s headquarters in Shanghai during summer, urging compensation for their losses, with some wearing shirts that read: “Pinduoduo’s immoral sellers – repay my hard-earned money.”

Since 2019, according to a spokesperson for Pinduoduo, the company has reported over 1,000 suspicious merchants to the corresponding authorities which led to the arrests of over 200 of them. Although the company recognizes that the issue of gambling syndicates masking themselves as e-commerce platforms is a difficulty that affects the whole industry, it continues to take action to protect its users in the form of alerting the relevant organisations. Tether Payments Platform was among those who were brought to justice.

Tether Payments Platform Busted

This year, China has strengthened its efforts to fight unlawful cross-border gambling, particularly paying attention to payments. On Thursday, Chinese state media said that 76 people were taken into custody in Guangdong province for suspicion of participation in a prohibited payment handling platform. According to the police, 120 online gambling sites and fraudulent investment structures had money moved to and from them using the Tether cryptocurrency token through this operation. An estimated 3,000 accounts on the system allowed bettors to carry out payments disguised as electronic transactions. Moreover, in June, the Chinese Ministry of Public Security initiated a “comprehensive reporting system to contest across the board gambling” that provided incentives for people who exposed those next door who were gambler.

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Updated: 26 June 2023
2 min to read

The professional casino player, author of books and articles about gambling, creator of gaming content. I study this field and am happy to share my knowledge and skills acquired over the years with everyone