Illegal Forex Transfers Cost Chinabank Payments $4.2 Million

Illegal Forex Transfers Cost Chinabank Payments $4.2 Million

Transactions related to unauthorized gambling websites cost third-party payment processor a record $4.2 million in fines. The State Administration of Foreign Exchange imposed the fine on the company.

A record fine or monitoring issues

Chinabank Payments was fined by the authorities for its apparent lapse in monitoring activities. The company is a unit of JD.com, an e-commerce giant. It is owned by JD Finance and is based in Beijing. The fine will directly affect JD.com’s finances and goodwill.

Illegal Forex Transfers Cost Chinabank Payments $4.2 Million

According to the authorities, Chinabank was helping residents in the mainland to transfer foreign currencies illegally across the border. Some of these transactions were also made to gambling websites licensed outside of China. The lapses took place between May 2017 and May 2018. They have accused several other payment channels in the country of similar violations.

The company acknowledged these problems back in 2017 when it said that it failed to supervise the access rights of some of its users because of which some external merchants made illegal transactions using their platform. According to the company, it made an internal investigation and expelled the merchants for their transactions.

The payment processor says that it is supportive of the decision taken by the regulators. The company then apologized for the issues and said that it is reflecting on its business very seriously because of the issues. The company also apologized for the negative impact it had on the industry.

What happens next?

The local media outlets have reported that illegal gambling operations in question were based in Cambodia. Some of these websites had names similar to some popular casinos in Macau. This includes names like SJM Holdings’ Lisboa and Las Vegas Sands. The media also reports that some 1.2 million customers recently engaged with the online operation based in Sihanoukville.

Problems in the gaming industry have become very rampant in China, especially those related to international foreign brands. At the beginning of this month, law enforcement authorities disrupted a similar large-scale multinational operation in Nanchang, the provincial capital of Jiangxi. These operations had collected $4.3 billion in wagers from about 1.2 million punters.

The ring was based in Preah Sihanouk province of Cambodia, where about 200 people were based in the region. The operation has a number of websites operating right now, including Macau Casino and Golden Lisboa. These casino operations deliberately try to imitate the names of established operations in order to sound legitimate.

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