Regulation
|4 min ReadAppLovin Faces SEC Risk Over $15B Crime Syndicate Link
Jax Morales
Senior Analyst
Published
Jan 24, 2026
As US markets reopened on January 20, 2026, AppLovin ($APP) shares dropped 4.8% in pre-market trading, extending a 15% three-day slide. Capitalwatch just dropped a 35-page short report labeling the ad-tech giant the "ultimate milestone of 21st-century transnational financial crime." Retail traders are buying the dip, but smart money is eyeing the DOJ filings. The core allegation connects AppLovin's meteoric rise directly to Cambodian "pig-butchering" scams and collapsed Chinese P2P networks.
The "Mobius Strip" Laundering Loop
Capitalwatch claims AppLovin facilitates money laundering via ad spend. A Cambodian super-app named WOWNOW, controlled by the Prince Group, allegedly dumps massive, disproportionate ad budgets into AppLovin. This is a front. The crime syndicate buys traffic through shell accounts. AppLovin books this as legitimate ad revenue on its balance sheet. The clean money is then wired to Prince Group offshore accounts as standard "developer revenue sharing."
The P2P Blood Money Nexus
The origins trace back to China’s 2019 Tuandai P2P collapse, which wiped out 220,000 retail investors. Key $APP shareholder Hao Tang allegedly helped Tuandai's founder move 632.89M RMB in illicit funds before the bust. The wash included private jets, shell companies, and cross-border shadow banking to bypass capital controls.
The Sister's $1.4B Shield
SEC filings reveal Ling Tang holds 20.49M shares of AppLovin (about 7.7% of the company) via Angel Pride Holdings. Capitalwatch cross-referenced Hong Kong corporate registries to prove Ling is Hao Tang’s sister. This multi-billion dollar stake is allegedly the anchor of the Tang family's money laundering apparatus.
The $15B Crypto Forfeiture
The final node is Chen Zhi, a naturalized Cambodian billionaire and founder of the Prince Group. In October 2025, the US DOJ seized $15B in Bitcoin from his network—the largest asset forfeiture in US history. The DOJ classified Prince Group as a transnational criminal organization running forced-labor crypto fraud camps. Chen Zhi was arrested and deported on January 7, 2026, just 12 days before this report dropped.
The False AI Narrative
AppLovin rallied 38x from its 2022 lows, hitting a $140B market cap in 2024. Wall Street bought the narrative that its AXON 2.0 engine was an AI breakthrough that defeated Apple's iOS 14 privacy changes. Q3 2025 revenue surged 68% to $1.4B. The short report suggests this growth was actually funded by criminal syndicates laundering money through the AXON algorithm, which was optimized to target vulnerable users with gambling apps.
Watch the upcoming Q4 earnings call in February. Short interest is sitting at 5%, but if Chen Zhi cuts a plea deal with the DOJ and flips on the Tang family's ownership structure, AppLovin will face an immediate SEC freeze.
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