New Delhi: A new white paper by CloudSEK has exposed an enormous Rs 5,000 crore money laundering system that is associated with the Chinese cyber syndicates working in India. The report reveals the manner in which these groups are using fraudulent payment gates, counterfeit fintech applications, and Unified Payments Interface (UPI) platforms to route illegal payments. Backed by more than 34,000 mule accounts, the network operates in 40+ countries and does not follow Reserve Bank of India (RBI) regulations, which constitutes a serious threat to the financial security of India.
The rich expose brings out real-life examples, such as one app laundering 166 crores on its own. It also shows the way syndicates use Indian citizens through Telegram as their money mules to transfer money to cryptocurrencies. Full of graphics and opinions of professionals, the white paper demands immediate intervention by policymakers and banks. It is an important source of information concerning this increasing wave of cybercrimes.
Shadow banking empire unveiled
The report by CloudSEK reveals the advanced schemes of the Chinese-related syndicates. Sham fintech services resemble real services, but they aim to scam users and regulators. Such applications make it easy to make quick, untraceable payments, as the digital payment systems in India have loopholes. The size of the network, 5,000+ crores each year, emphasises the extent to which the network is integrated with the financial system in India.
The syndicate depends on an extensive network of more than 34,000 mule accounts usually run by unknowing or forced Indian citizens. These people are hired via Telegram and send illegal money at a very low commission. The report explains how these mules are used to hide the money trail where money is converted into cryptocurrency to make international cashouts in over 40 countries.
Threat to National Security
In addition to losses in finances, the laundering network is a threat to the national security of India. Syndicates promote the activity of cybercrimes by evading RBI norms, which facilitates the wider scope of cybercrimes. The white paper by CloudSEK contains practical recommendations to the investigators, asking banks and law enforcement to improve their supervision and cooperation and destroy this dark web pipeline.
The full report can be downloaded at the site of CloudSEK to get a detailed analysis and case studies.