Capitalwatch short report accuses AppLovin of "advertising money laundering," becoming a black money outlet for the Prince Group

Short-selling firm Capitalwatch recently released a short report on AppLovin (NASDAQ: APP), a data analytics company listed on the US stock market, accusing it of having a shareholder structure, advertising revenue flow, and product usage that are highly related to the transnational criminal organization “Prince Group (Prince Group)”, and suggesting it may be a money laundering outlet for the group. They called for US regulatory authorities to initiate investigations.

Short Report: AppLovin is the “Black Money Laundering Outlet” of Prince Group

The report positions AppLovin as the final safe haven for proceeds from cross-border crimes. Capitalwatch found that some illegal funds from China and Southeast Asia, after being packaged through multi-layer offshore structures and commercial transactions, ultimately enter the US capital markets in the form of legitimate funds.

The report targets key individuals including AppLovin and its major shareholders Hao Tang (Hao Tang) and Ling Tang (Ling Tang), as well as Prince Group’s leader Zhi Chen (Zhi Chen), building a seemingly airtight and large-scale scam and money laundering empire in terms of equity, cash flow, technology, and revenue.

Meanwhile, Capitalwatch also criticizes the US Securities and Exchange Commission (SEC) and Wall Street financial institutions for failing to thoroughly review client and company backgrounds, abandoning their role as “gatekeepers.”

(Prince Group Founder Zhi Chen Arrested and Deported Back to China for Investigation)

Shareholder Background Analysis: From the P2P Ponzi Scheme of Tuandai.com to a US-listed Company

The report first targets Hao Tang, the major shareholder of AppLovin, claiming that his wealth source is related to the massive capital outflow before the collapse of China’s P2P platform Tuandai.com (Tuandai.com). It also uses Ling Tang as part of the family network, holding about 7.7% equity through offshore company Angel Pride Holdings, to diversify holdings and reduce regulatory detection.

It is reported that Tuandai.com illegally raised approximately 253.5 billion RMB during its operation, involving over one million victims. On the eve of the platform’s collapse, about 667 million RMB in funds were transferred overseas through complex underground banking, false trade, and private jet escrow fees, with Hao Tang identified as the mastermind behind the scheme.

“Advertising as Laundering” Model: How Criminal Proceeds Turn into Financial Report Income?

In terms of cash flow, Capitalwatch describes this money laundering process as “Advertising-as-Laundering (Advertising-as-Laundering).”

Criminal groups use shell companies or specific applications, such as the local Cambodian super app WOWNOW (e.g., WOWNOW), to purchase大量广告投放 from AppLovin; these expenses can be recognized as “advertising revenue” on the company’s books, and by acting simultaneously as advertisers and traffic suppliers, they maximize ad revenue sharing, ultimately settling into overseas accounts controlled by Prince Group.

The report points out that the “disproportionate advertising budget and market scale” is a suspicious signal, emphasizing that this business model is packaging criminal proceeds, which are difficult to enter the financial system, as cross-border legitimate business payments.

Product Controversy: Are “Distribution and Algorithm Technologies” Criminal Accomplices?

On the product side, the report also questions AppLovin’s distribution and advertising delivery technologies, Array and AXON algorithms.

Investigations found that the Array system has a “silent installation” mechanism, which could be exploited to bypass mainstream app store reviews and implant gambling or scam apps into users’ phones.

Additionally, the machine learning-based AXON algorithm is accused of precisely screening users with financial anxiety or psychological vulnerabilities to push high-risk “pump-and-dump” scam content in pursuit of advertising ROI.

While these technologies and interests are highly integrated and have driven revenue growth, they are also believed to be prone to abuse, potentially causing serious data security and ethical crises.

AppLovin’s Next Step: The Ultimate Test of Regulatory Scrutiny

As Prince Group faces law enforcement actions, several core figures of AppLovin are also confronting an unprecedented regulatory storm. Capitalwatch believes that the US Department of Justice (DOJ) may initiate civil forfeiture proceedings against related controversial equity, while the SEC might investigate the company’s background.

Furthermore, given the backgrounds of its major shareholders and the vast US user data it holds, the company could trigger a national security review by the Committee on Foreign Investment in the United States (CFIUS), risking forced delisting.

This article, Capitalwatch’s short report, points out that AppLovin’s “Advertising as Laundering” is the black money export of Prince Group, first appearing on Chain News ABMedia.