Pinduoduo and other major shopping apps allegedly used to launder billions of dollars to offshore accounts

EcommerceIndustry

Pinduoduo and other major Chinese ecommerce players are being used to launder billions of dollars to offshore accounts, according to authorities.

Gamblers are using Pinduoduo to bypass strict Chinese capital controls which prevent them from transferring money to international websites.

According to the Financial Times, gamblers can purchase fake items on Pinduoduo and have the equivalent amount of funds transferred illegally to an offshore gaming account.

Police forces across the country and the People’s Bank of China are investigating these networks, stating that at least $2 billion has so far been illegally transferred using this method.

READ MORE: Pinduoduo and Alibaba added to US trade “blacklist” over counterfeit concerns

Hundreds of millions of fake packages were found by police to have been inserted into courier firms’ tracking systems to complete these fake ecommerce transactions, with many of the same package tracking numbers appearing in money-laundering cases.

Concerns have also been raised that these transactions could inflate the ecommerce platform’s gross merchandise volumes (GMV).

While gamblers have readily admitted to using Pinduoduo, other shopping sites have been implicated in the investigations, but Alibaba and JD.com declined to comment.

Pinduoduo said that it is working with authorities to identify these groups, and that “gambling syndicates operating under false pretences on ecommerce platforms is an industry-wide problem”.

It has reportedly referred more than 1000 leads to authorities since 2019 resulting in more than 200 arrests, adding that it does not include orders identified as fake in its GMV.

Click here to sign up to Charged free daily email newsletter

EcommerceIndustry

RELATED POSTS

Leave a Reply

Your email address will not be published. Required fields are marked *

Fill out this field
Fill out this field
Please enter a valid email address.

Menu

SUBSCRIBE TO OUR NEWSLETTER

Sign up to our daily newsletter to get all the latest retail tech news and insights direct to your inbox.

  • This field is for validation purposes and should be left unchanged.