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Short-selling firm Capitalwatch has released a short report against US Nasdaq-listed AppLovin Corporation, accusing the company’s core shareholder structure of systemic compliance risks and major financial crimes. The report states that AppLovin’s primary shareholder, Hao Tang, and his capital network are suspected of injecting illegal funds from China and Southeast Asia into the core of the US capital market.

According to Capitalwatch’s latest report, AppLovin not only has major fraudulent disclosures in its SEC filings, but its management is also accused of ignoring anti-money laundering (AML) laws, objectively assisting the Prince Group—classified by the US Department of Justice (DOJ) as a transnational criminal organization (TCO)—in legalizing its assets.

The report accuses Hao Tang of carrying a multibillion-dollar financial black hole from the Chinese P2P platform Tuandaiwang, and claims he is a target wanted by Chinese judicial authorities. The report states that AppLovin has become the final channel for cross-border crime boss Zhi Chen (ultimate controller of Prince Group) and others to launder assets; illegal funds from Tuandaiwang’s fundraising and proceeds from Southeast Asia “pig-butchering” scams flow into the US stock market via this platform.

The report details a closed loop: illegal funds are converted into advertising fees via Cambodia’s super app WOWNOW, flow into AppLovin’s platform, and eventually become legitimate US dollar assets through revenue-sharing and share price appreciation. Capitalwatch claims AppLovin's technology algorithms Array and AXON acted as “digital weapons” in the process, helping crime groups precisely target victims and distribute malicious software.

This round of short-selling has drawn significant market attention. As early as January 18, rumors on social platform X suggested Capitalwatch would release a report against a large listed company, with market speculation centered on AppLovin. Given that Capitalwatch’s previous accusation of financial fraud against New Horizon Health ultimately led to its delisting in 2025, investors are generally concerned that the accusations against AppLovin may ignite a regulatory storm.

Core Accusations: Sources of Illegal Funds & Money Laundering Network

The report’s core accusations are supported by court rulings from the Bordeaux Court of Appeal in France, SEC 13G filings, and DOJ indictments against Zhi Chen, among other documents.

The report alleges that Hao Tang’s immense wealth did not come from legitimate commercial accumulation, but from the direct inheritance of around RMB 6.67 billion (approx. $957 million) in illegal funds transferred before the collapse of China’s Tuandaiwang P2P platform. It also accuses Hao Tang of obtaining roughly RMB 15 billion (approx. $2.15 billion) in gambling “black money” from transactions with “offshore gambling king” Zhihui Yang at Macau gambling tables.

According to the report, during its operation Tuandaiwang illegally raised a total of RMB 253.5 billion (approx. $36.37 billion) from over 1.12 million investors. After an announcement by Dongguan Public Security Bureau on March 28, 2019, Tuandaiwang collapsed and police investigations revealed a debt black hole of about RMB 34.8 billion (approx. $5 billion).

Quoting the French court files, the report states that during the key window before Tuandaiwang's cash flow broke (from February 2018 to March 2019), Hao Tang used a complex shell company network to help founder Jun Tang transfer RMB 632.89 million (about $90 million) in illegal funds, with total indirectly related funds estimated at $957 million.

Family Collusion: Ling Tang and Key Clues

According to the report, the French court verdict revealed that judicial audits found about RMB 5.3 million ($760,000) of stolen funds were transferred to a company account controlled by Hao Tang’s “sister.”

By cross-checking SEC documents, the report found that AppLovin’s shareholder list shows an individual named Ling Tang alongside Hao Tang. Ling Tang holds about 20.49 million shares of AppLovin through Angel Pride Holdings Limited, occupying 7.7%, making her the biggest individual shareholder after Hao Tang and institutional investors.

The report notes that although SEC documents show Ling Tang holds Canadian nationality, her reported mailing address is "Room 11, 22/F, Global Trade Square, 61-63 Wing Hong St, Cheung Sha Wan, Kowloon, Hong Kong", which is in the same neighborhood as the address Hao Tang filed in Discovery Key Investments documents (Room C, 5/F, Shun Cheong Industrial Building, 26 Wing Hong St, Cheung Sha Wan, Kowloon, Hong Kong).

The report concludes that, combining French court records regarding “sister” assisting with fund transfer, and the substantial synchronous shareholding of Ling Tang and Hao Tang in AppLovin, there is ample reason to believe Ling Tang is Hao Tang’s sister, and that the billions in shares held by Angel Pride Holdings are a key element in the Tang family’s money laundering network.

Southeast Asian Crime Network: Prince Group and Zhi Chen

The report claims that if Tuandaiwang provided Hao Tang with his seed capital, then Cambodia’s Prince Group provided ongoing cash flow and a money laundering infrastructure.

The report points out that Prince Group founder Zhi Chen, born in Fujian, China, has obtained Cambodian citizenship and is the group’s absolute head. The DOJ and UK government have officially designated Prince Group as a TCO; Zhi Chen has been indicted by the Eastern District Court of New York, accused of leading a transnational criminal network engaged in telecommunication fraud and money laundering conspiracies.

According to the report, in enforcement actions against Zhi Chen, the DOJ seized about $15 billion in cryptocurrencies (mainly Bitcoin) linked to Chen. The report claims this figure breaks DOJ confiscation records and indirectly proves Prince Group’s stunning gains as a global cybercrime hub.

The report states that, according to the DOJ indictment, Prince Group set up multiple prison-like closed campuses (such as in Sihanoukville and suburbs of Phnom Penh) in Cambodia. These are often disguised as tech parks, resorts, or hotels.

Labor on site consists mainly of foreigners lured by promises of high-paying jobs, who, upon entry, have their passports confiscated and are forced—under armed guard—to work for dozens of hours daily on “pig-butchering” scams.

Capital Intersection: Geotech Holdings' Secret Overlap

The report states that investigations show Hao Tang and Zhi Chen are not on entirely separate paths—they have in-depth overlap in the Hong Kong capital market.

The report notes that at the end of 2018, at the eve of the Tuandaiwang crisis, when Hao Tang urgently needed offshore financing channels, a control change occurred in Hong Kong-listed Geotech Holdings.

A company called Star Merit Global Limited (BVI registered) made a mandatory unconditional cash offer for control. The sole shareholder of Star Merit Global Limited is Zhi Chen.

The report states that in Hong Kong “shell company” circles, Hao Tang and Zhi Chen share the same ecosystem. Geotech Holdings served as Zhi Chen’s Hong Kong listing platform, aiming to capitalize Cambodia’s grey assets through the listed company.

As a senior capital operator (former actual controller of Goldenway Group), Hao Tang provided capital channels and structural support. This operational overlap during the specific time window proves their collaboration within the money laundering network.

Technological Collusion: Array and AXON as Criminal Tools

The report states that AppLovin’s relationship with Prince Group goes beyond equity investment—the company’s two core technology products, Array and AXON algorithms, objectively serve as “digital weapons” used by the transnational crime syndicate for online fraud and illegal gambling distribution.

The report notes that Prince Group’s Jinbei Group operates many illegal online casinos and scam applications (such as fake trading apps disguised as MetaTrader).

Due to strict policy enforcement on gambling and malware by Google Play and Apple App Store, these apps cannot list through legitimate channels and need underground channels to bypass “gatekeepers.” AppLovin’s Array product (and its component AppHub) offers a perfect solution for this.

The report quotes in-depth forensics by short-seller Culper Research and tech security expert Ben Edelman: investigations show AppLovin, through business deals with mobile device makers (such as Samsung and Xiaomi’s overseas models) and telecoms (e.g. T-Mobile), gains system-level permissions on Android via pre-installed software.

This means AppLovin can “directly download” and install apps on users’ phones without their knowledge, or with a single ad click.

According to the report, security researchers’ code analysis shows AppLovin’s SDK contains commands like “InstallOnClose” and “IsAutoInstall,” which strip users of choice and turn their phones into “puppets” exploited by advertisers.

Money Laundering Closed Loop: “Ad-is-Laundering” New Model

The report asserts the deepest link between Prince Group and AppLovin is not just a client relationship, but a money laundering closed loop based on digital ad transactions—the “Ad-Tech Laundromat.”

The report states that by leveraging AppLovin’s central role in the global ad network, the crime group created a perfect path for cleaning funds.

First step: Prince Group uses its network of shell companies (like WOWNOW-related entities, or ones registered in Singapore/Hong Kong) to open advertiser accounts on AppLovin, with funding sourced from “pig-butchering” scam-based cryptocurrencies.

Second step: Prince Group pays AppLovin hundreds of millions of US dollars, nominally to purchase ad traffic.

The report says WOWNOW, as a local life app mainly for the Cambodian market, has ad spending on AppLovin grossly disproportionate to its market scale. This surplus ad spending essentially serves as a “service fee” for money laundering and a vehicle for fund transfer.

Third step: AppLovin books the ad revenue as legitimate income (recorded in Nasdaq financial reports), then settles the funds into overseas publisher accounts controlled by Prince Group as “developer revenue shares” or “ad publishing fees.”

At this point, according to the report, scam-tainted, blood-soaked money is now legitimate remittance from a Nasdaq-listed American company.

Compliance Crisis and Regulatory Risks

The report states that AppLovin is currently sitting atop a compliance volcano. Short-seller Culper Research pointed out in its 2025 report that Hao Tang is not a typical financial investor, but a “bad actor” involved in “money laundering, human trafficking, and illegal gambling.”

According to the report, under Nasdaq listing rules and the US Bank Secrecy Act (BSA/AML), if a key shareholder (persons acting in concert holding more than 10%) is proven to have criminal-origin funds, the company faces delisting and asset freeze by judicial authorities.

The report says that to cover their tracks, the company devised a malicious “options hijack” scheme:

Inducing employees to transfer options to shadow companies under Kylin, then forcibly confiscating the equity via new contracts, finally laying off employees with discounted cash settlements.

The report says this not only confirms the existence of Chinese operations, but also exposes the “gang-style” governance of management, who exploit employees’ rights to sever legal and financial liabilities.

The report issues the highest level risk warning to regulators and investors, recommending the DOJ immediately freeze AppLovin shares held by Hao Tang and Ling Tang via Discovery Key, Midterm Success, and Angel Pride; requests the SEC to mandate a five-year forensic audit of AppLovin’s ad revenue sources; and urges CFIUS to re-examine whether AppLovin poses a national security threat.

Its final advice to investors is a “strong sell,” stating this is an empire built on quicksand, founded on the tears of Tuandaiwang victims and the blood and sweat of Southeast Asian forced laborers.

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