In what is the largest financial penalty to be issued to a third-party payment processor, the Beijing office of China’s foreign exchange regulator has imposed a ¥29.4m (US$4.2m) fine on Internet Banking Online (Beijing) Technology Co Ltd.
Known as Chinabank Payments, the firm is owned by JD Finance, originally part of the online retailer JD.com. Based in Beijing, it has been accused of helping residents on the mainland transfer currency overseas, including to several online gambling sites with international licenses.
imposed a ¥29.4m (US$4.2m) fine on Internet Banking Online (Beijing) Technology Co Ltd
The fine states that gambling transfers were made between May 2017 and May 2018, and that they also included other mainland payment channels.
Macau casinos involved
Local media reports suggest that the operation originated in Cambodia, and hinged on websites that may have already had a relationship with popular casino brands based in Macau. These casinos have been speculated as Las Vegas Sands and Lisboa, part of SJM Holdings.
According to the state-run media, the online operation based out of Sihanoukville had around 1.2m customers.
JD.com already given a warning
The news comes after JD.com was given a warning in October by the Monetary Authority of Macau (AMCM) alongside other mainland-registered financial firms. This was over “unauthorized financial activity.”
Chinabank Payments has since apologized for its actions that resulted in the fine. Speaking to Reuters, the company said that it had already expelled staff members who were responsible and that it had:
Seriously reflected on our business management and carried out rectifications.”
China cracking down on gambling
This news comes after a busy few months of China cracking down on companies that support gambling. Last month 100 police officers raided fintech firm 51 Credit Card Inc over links to online gambling payments. Although based in Hong Kong, the firm had offices in Hangzhou.
Meanwhile, Alipay, a financial software platform heavily used in China, announced that it has referred 500 cases of possible gambling payments to the local authorities already this year.
A special unit has now been created to ensure a ‘zero tolerance’ approach to online gambling payments, with all suspects passed over to a specialist team.