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Chinese Tech Blog Accuses E-Commerce Platform Pinduoduo of Facilitating Illegal Transactions for Gambling Websites

The China-based e-commerce platform Pinduoduo is rumored as a possible solution for gambling sites which are seeking for an alternative to process illicit money transactions.

Today, a controversy involving the e-commerce platform’s name emerged, after a Chinese tech blog called Chaping published information that the e-commerce platform Pinduoduo could facilitate the processing of illegal gambling transactions. The article, which was posted on the blog Sunday night, accused Pinduoduo into lack of enforcement thanks to which gambling payment channels in the form of regular e-commerce stores were permitted to offer gambling transactions through the brand’s platform.

According to information published on Chaping, a number of stores Pinduoduo are actually acting as payment fronts for gamblers who choose the WeChat Pay for making money transactions to online gambling operations. After scanning a QR code from casino applications, such customers are redirected to a store on the Pinduoduo platform to complete the transaction via WeChat Pay.

The company, which is based in Shanghai, rejected the accusations in an e-mailed statement to a local media. Pinduoduo further revealed its intentions to file a defamation lawsuit against the tech blog, seeking damages estimated to RMB 10 million (approximately $1.5 million).

Currently, all forms of gambling are suspended in mainland China, except for lotteries. Even though lotteries are not illegal in the country, the regulation is very strict, especially when it comes to the ones which offer their services online. A few years ago, in 2015, the Government of mainland China suspended the two official Chinese lotteries, the sports lottery and the welfare lottery, from providing online services but underground online sports lottery is still popular among local residents despite the restrictions.

Pinduoduo’s Requirements for Online Stores Not Sufficiently Strict, Chaping Claims

Using various online stores as a cover-up of gambling payments is not a precedent in the global online gambling sector, but is still illegal in many countries across the world.

The method was adopted by some gambling operators as a way for them to incorporate local payment services. For the time being, WeChat Pay and Alipay are the biggest online payment providers on the territory of China but they are also under the strict regulation of the country which aims to avoid illegal payment transactions to be made to and from online casinos.

Now, Pinduoduo claims that the information revealed by the tech blog Chaping is not up-to-date, as all the stores mentioned in the blog’s article had been closed before the publication. The e-commerce platform also explained that it is working hand in glove with both WeChat Pay and Alipay to suspend alleged illegal activities.

Chaping, however, has pointed out that the requirements for setting up a store on the e-commerce platform Pinduoduo are not sufficiently strict, as stores are required to provide only an ID number, and the same ID can be used to apply for multiple stores. Pinduoduo, on the other hand, claims that there is a procedure under which the stores available on the platform are required their real names in order to be registered, which allows any unlawful behavior to be traced.

As reported by TechNode, a reported of theirs tested the store setup process of the Pinduoduo platform today. For the time being, there is an option for a store registration for companies and individuals. Companies are currently required to provide a business license, while individuals are allowed to register a store on the e-commerce platform using only an ID.

 Author: Hannah Wallace

Hannah Wallace has been part of our team since the website was launched. She has a master’s degree in IT.