A short-selling firm, Capitalwatch, has released a short report targeting Nasdaq-listed AppLovin Corporation, accusing the company's core shareholder structure of involving systemic compliance risks and major financial crimes. The report alleges that AppLovin's major shareholder, Hao Tang, and the capital network behind him, are suspected of injecting illegal funds from China and Southeast Asia into the core of the U.S. capital markets.
According to the latest report from Capitalwatch, AppLovin not only engaged in significant fraudulent concealment in its SEC filings, but its management is also accused of turning a blind eye to anti-money laundering (AML) laws, objectively assisting the Prince Group—designated as a Transnational Criminal Organization (TCO) by the U.S. Department of Justice (DOJ)—in legitimizing assets. The report alleges that Hao Tang carries the burden of a multi-billion dollar financial black hole from the Chinese P2P platform Tuan Dai Wang and is labeled a fugitive from Chinese judicial pursuit. It claims AppLovin has become the final outlet for asset money laundering by transnational crime leaders like Chen Zhi (the actual controller of Prince Group), with illegal fundraising proceeds from Tuan Dai Wang and profits from Southeast Asian "pig-butchering" scams flowing into the U.S. stock market through this platform. The report details a closed loop: illegal funds are converted into advertising fees through the Cambodian super-app WOWNOW, flow into the AppLovin platform, and ultimately become legitimate dollar assets through revenue sharing and stock price appreciation. Capitalwatch states that AppLovin's technology algorithms, Array and AXON, acted as "digital weapons" in this process, helping criminal groups precisely target victims and distribute malicious software. This short report has attracted significant market attention. As early as January 18, messages on social platform X suggested Capitalwatch would release a report targeting a listed company with a market cap in the hundreds of billions, with market speculation pointing towards AppLovin. Given that Capitalwatch's previous allegations of accounting fraud against Novogene ultimately led to its delisting in 2025, investors widely fear these accusations against AppLovin could trigger a regulatory storm.
Core Allegations: Sources of Illegal Funds and Money Laundering Network Basing its claims on documents including a judgment from the Bordeaux Court of Appeal in France, SEC Form 13G filings, and a U.S. DOJ indictment against Chen Zhi, the report puts forward several core allegations. The report states that the massive wealth of AppLovin's major shareholder Hao Tang does not originate from legitimate business accumulation but directly inherits approximately 6.67 billion yuan (about $957 million) in illegal fundraising proceeds transferred before the collapse of the Chinese P2P platform Tuan Dai Wang. The report further alleges that Hao Tang obtained roughly 15 billion yuan (approximately $2.15 billion) in gambling black money through transactions with "offshore gambling kingpin" Yang Zhihui at Macau gambling tables. According to the report, during its operation, Tuan Dai Wang illegally raised a cumulative total of 253.5 billion yuan (about $36.37 billion) from over 1.12 million retail investors. After the Dongguan Public Security Bureau issued a notice on March 28, 2019, Tuan Dai Wang collapsed, with police investigations revealing an unresolved debt black hole of approximately 34.8 billion yuan (about $5 billion). Citing French court documents, the report claims that during the critical window just before Tuan Dai Wang's funding chain broke (February 2018 to March 2019), Hao Tang used a complex network of shell companies to assist Tuan Dai Wang's founder, Tang Jun, in transferring 632.89 million yuan (about $90 million) in illegal funds, with the actual indirectly associated funds estimated at $957 million. Family Collusion: Ling Tang and Key Clues The report states that French court judgments disclose that judicial audits found approximately 5.3 million yuan (about $760,000) in illicit proceeds were transferred to a company account controlled by Hao Tang's "sister." Cross-referencing SEC filings, the report identified a natural person named Ling Tang appearing alongside Hao Tang on AppLovin's shareholder list. Ling Tang holds approximately 20.49 million shares of AppLovin, representing a 7.7% stake, through Angel Pride Holdings Limited, making her the largest individual shareholder after Hao Tang and institutional investors. The report points out that although SEC filings show Ling Tang holds Canadian citizenship, her declared correspondence address is "Room 11, 22/F, International Commerce Centre, 61-63 Cheung Sha Wan Road, Kowloon, Hong Kong," located in the same district as the address Hao Tang declared in Discovery Key Investments documents ("Room C, 5/F, Shun Cheong Industrial Building, 26 Wing Hong Street, Cheung Sha Wan, Kowloon"). The report concludes that, combining the content about the "sister" assisting fund transfers in French court records with Ling Tang's synchronized large shareholding in AppLovin alongside Hao Tang, there is sufficient reason to认定 Ling Tang is Hao Tang's sister, and the multi-billion dollar shares held by Angel Pride Holdings are a key link in the Tang family's money laundering network. Southeast Asian Crime Network: Prince Group and Chen Zhi The report claims that if Tuan Dai Wang provided Hao Tang's initial capital, then Cambodia's Prince Group provided ongoing cash flow replenishment and money laundering infrastructure. The report states that Prince Group founder Chen Zhi, born in Fujian, China, and now a naturalized Cambodian citizen, is the absolute core of the group. The U.S. DOJ and the UK government have formally designated Prince Group as a Transnational Criminal Organization (TCO), and Chen Zhi himself has been indicted by the U.S. District Court for the Eastern District of New York, accused of leading a transnational criminal network engaged in conspiracy to commit wire fraud and money laundering conspiracy. According to the report, in law enforcement actions against Chen Zhi, the U.S. DOJ seized approximately $150 billion in cryptocurrency (primarily Bitcoin) associated with him. The report states this figure broke DOJ seizure records, indirectly confirming Prince Group's staggering wealth accumulation capacity as a global cybercrime hub. The report states, based on the U.S. DOJ indictment, that Prince Group established multiple prison-like closed compounds in Cambodia (e.g., in Sihanoukville, suburban Phnom Penh). These compounds are typically disguised as tech parks, resorts, or hotels. The workforce inside these compounds mainly consists of foreigners lured by promises of high-paying jobs; upon entry, their passports are confiscated, and victims are forced to work over ten hours daily under armed guard conducting "pig-butchering" scams. Capital Intersection: The Covert Overlap of Geotech Holdings The report states that its investigation found Hao Tang and Chen Zhi are not unrelated parallel lines; their trajectories deeply overlap in the Hong Kong capital markets. The report points out that in late 2018, precisely during the pre-crisis period of Tuan Dai Wang when Hao Tang urgently needed offshore channels for funds, a change of control occurred at the Hong Kong-listed company Geotech Holdings. A BVI company named Star Merit Global Limited launched a mandatory unconditional cash offer to acquire control of the company. The sole shareholder of Star Merit Global Limited is Chen Zhi. The report claims that in the world of Hong Kong "shell stocks," Hao Tang and Chen Zhi occupy the same niche. Geotech Holdings served as Chen Zhi's listed platform in Hong Kong, aimed at capitalizing grey assets from Cambodia through a public company. Hao Tang, as an experienced capital operator (former actual controller of Goldenway Group), provided capital channels and structural support during this process. The operational overlap within this specific time window proves their collaborative relationship within the money laundering network. Technical Conspiracy: Array and AXON as Criminal Tools The report alleges that the relationship between AppLovin and Prince Group is not limited to equity investment at the capital level; two of the company's core technology products—the Array and AXON algorithms—objectively served as "digital weapons" for the transnational criminal group to execute online scams and distribute illegal gambling. The report states that Prince Group's subsidiary, Jin Bei Group, operates numerous illegal online casinos and scam applications (such as fake trading software disguised as MetaTrader). Due to strict policy enforcement against gambling and malware on Google Play Store and Apple App Store, these apps cannot be listed through legitimate channels and desperately need underground avenues to bypass the "gatekeepers." AppLovin's Array product (and its component AppHub) provided a perfect solution. Citing in-depth forensics from short-seller Culper Research and security expert Ben Edelman, the report claims investigations show AppLovin, through commercial partnerships with mobile device manufacturers (like Samsung, Xiaomi overseas versions) and telecom operators (like T-Mobile), gained system-level permissions on Android via pre-installed software. This means AppLovin could "directly download" and install applications onto users' phones without their knowledge, or after just one click on an ad. The report states that code analysis by security researchers revealed AppLovin's SDK contains commands like "InstallOnClose" and "IsAutoInstall," effectively stripping users of choice and turning victims' phones into "puppets" at the mercy of advertisers. Money Laundering Closed Loop: The New Model of "Advertising as Money Laundering" The report proposes that the deepest link between Prince Group and AppLovin is not merely a client relationship, but a money laundering closed loop based on digital advertising transactions—"The Ad-Tech Laundromat." The report claims that by leveraging AppLovin's central position in the global advertising network, the criminal group created a perfect fund cleaning path.
Step one: Prince Group uses its controlled network of shell companies (like the aforementioned WOWNOW-linked entities, or shells registered in Singapore/Hong Kong) to open advertiser accounts on the AppLovin platform, with funds sourced from cryptocurrency obtained through "pig-butchering" scams. Step two: Prince Group pays hundreds of millions of dollars to AppLovin, nominally for purchasing advertising traffic. The report states that investigations found WOWNOW, a local lifestyle app primarily serving the Cambodian market, had advertising expenditure on AppLovin grossly disproportionate to its market size. This excessive advertising spending is essentially the "handling fee" for money laundering and the carrier for fund transfer. Step three: AppLovin recognizes the advertising revenue as legitimate income (recorded in Nasdaq financial reports), then settles the funds to overseas publisher accounts controlled by Prince Group in the form of "developer revenue sharing" or "ad publisher fees." The report claims that at this point, the originally blood-stained scam funds have been transformed into legitimate remittances from a U.S. Nasdaq-listed company.
Compliance Crisis and Regulatory Risk The report states that AppLovin is currently sitting on a compliance volcano. Short-seller Culper Research explicitly stated in its 2025 report that Hao Tang is not an ordinary financial investor but a "Bad Actor" involved in "money laundering, human trafficking, and illegal gambling." The report points out that under Nasdaq listing rules and the U.S. Bank Secrecy Act (BSA/AML), if the funds of a major shareholder (acting in concert holding over 10%) are proven to be proceeds of crime, the company faces delisting risk, and the relevant equity could be subject to judicial freezing. The report alleges that to cover its tracks, the company orchestrated a malicious "option hijacking":
Inducing employees to transfer their options to shadow companies under Kylin, then forcibly confiscating the equity after re-signing contracts, and finally dismissing employees with discounted cash settlements.
The report states this not only confirms the existence of its China operations but also exposes management's gangster-style governance in plundering employee rights to sever legal and financial obligations. The report issues a highest-level risk warning to regulators and investors, recommending the U.S. DOJ immediately freeze the AppLovin shares held by Hao Tang and Ling Tang through Discovery Key, Midterm Success, and Angel Pride. It suggests the SEC should mandate a forensic audit of AppLovin's advertising revenue sources over the past five years, and CFIUS should re-review whether AppLovin constitutes a national security threat. The report's final recommendation to investors is a "Strong Sell," calling AppLovin an empire built on quicksand, its foundations buried with the tears of Tuan Dai Wang victims and the sweat and blood of enslaved workers in Southeast Asian compounds.
