Chinese Dark Web Syndicates Siphoning Crores Daily Through Mule Accounts From India: CloudSEK
A single fraudulent app analysed by CloudSEK facilitated Rs 166 crore in transactions, involving 34,299 unique mule accounts in just 12 months.
Chinese-led syndicates are exploiting gaps in India’s digital economy, operating illegal payment gateways that bypass Reserve Bank of India regulations, a new report by cybersecurity company CloudSEK shows.
These gateways act as the foundation for illegal activities, enabling the transfer of dirty money through a network of “mule” bank accounts to hide its source before extracting it through cryptocurrency or hawala networks, the report says.
Massive Laundered Amount; 40+ Countries Involved
A single fraudulent app analysed by CloudSEK facilitated Rs 166 crore in transactions, involving 34,299 unique mule accounts in just 12 months. With an estimated 25 similar apps, the total laundered amount could reach Rs 4,000–5,000 crore annually, with a daily volume of Rs 10–15 crore.
Criminals target vulnerable Indians — unemployed youth, students, and rural communities — through fraudulent apps, face-to-face agents, and “work-from-home” OTP-sharing scams to harvest bank accounts.
Over 40 countries are involved in the illegal payment gateway network. As per CloudSEK, the syndicates operate from Southeast Asia and the Mekong region, using mule accounts from India, Pakistan, Bangladesh, and beyond. Funds are laundered through dynamic UPI IDs, cryptocurrency, and fake international trade.
Over 100 Telegram channels promote these gateways, while YouTube tutorials with 37,200+ views guide fraudsters on integrating APIs. Shell companies pose as legitimate fintechs, using paid ads on Google, Facebook, and Instagram to whitewash their operations, the report showed.
Three-Tier Exploitation Model
CloudSEK's research identified three distinct categories of illegal payment gateway clients, each charged different fees based on risk levels:
Gaming and gambling platforms (5% deposit, 3% withdrawal fees): Including illegal casinos and betting apps like crash games.
Ponzi and investment schemes (7-8% deposit, 4-5% withdrawal fees): Fake investment platforms promising unrealistic returns.
Mixed scam operations (10% deposit, 10% withdrawal fees): Multi-source fraud including loan scams and crypto doubling schemes.
After funds have been gathered, they go through a layering process involving 7-10 distinct mule accounts within a matter of minutes, which makes it very challenging to detect and trace. The last phase consists of moving laundered funds out of India via cryptocurrency acquisitions, conventional hawala systems, or trade-related money laundering.
Consequences For India
The implications for India include:
Economic Drain: The shadow economy siphons billions of rupees annually.
Financial System Integrity: Fraudulent transactions overwhelms bank fraud detection systems and can erode public trust.
Social Harm: Indian citizens are victimised first as targets of scams and then as money mules.
National Security Risks: The infrastructure could fund activities against India’s interests, plus fraudulent apps pose espionage risks.
