Posted by Bengaluru: Cybersecurity firm CloudSEK has uncovered a sophisticated network of illegal payment gateways operated by Chinese dark-web syndicates that are exploiting India’s digital banking infrastructure to launder billions of rupees annually.
The findings are part of a new whitepaper titled “Chinese-Operated Illegal Payment Gateways Exploiting & Laundering in the Indian Financial Network.” The report reveals how transnational criminal groups have created a parallel financial ecosystem, using Indian mule bank accounts and UPI systems to funnel funds from illicit activities such as online gambling, Ponzi schemes, and digital fraud.
Chinese dark-web syndicates
CloudSEK estimates that a single fraudulent app moved ₹166 crore through nearly 400,000 transactions in one year. With over 25 similar apps potentially active, the laundered volume could reach ₹5,000 crore annually.
These networks recruit vulnerable Indians—unemployed youth, students, and rural populations—via fake job offers, OTP-sharing scams, and predatory apps. The harvested bank accounts are then used in a multi-layered laundering process that often ends with cryptocurrency conversions or trade-based money laundering.
CloudSEK’s research also highlights the global nature of these operations, involving over 40 countries and leveraging technologies like dynamic UPI IDs, cryptocurrency (primarily USDT-Tether), and international shell companies disguised as fintechs. Telegram groups, YouTube tutorials, and paid social media ads further enable the spread of these operations.
The report categorises illegal gateway clients into three tiers—gambling platforms, Ponzi schemes, and mixed-scam operations—each charged transaction fees ranging from 3% to 10%.
“These illegal payment gateways are not just financial crimes; they’re a direct attack on India’s digital economy and citizen trust, Our research arms stakeholders with actionable intelligence to disrupt these networks and protect India’s financial sovereignty,” said Mayank Sahariya, Cyber Threat Analyst – CloudSEK.
“Financial institutions, regulators, and law enforcement agencies must move beyond reactive measures to proactive, intelligence-driven strategies. The window for action is narrowing as these networks continue to expand and sophisticate their operations,” added Sahariya.
Indian authorities have already taken action in similar cases. The Enforcement Directorate, Hyderabad Police, and Odisha’s EOW have uncovered laundering schemes worth hundreds of crores involving Chinese nationals.
CloudSEK has so far reported around 47,000 mule accounts—representing ₹250 crore in transactions—to Indian banks. The firm continues to monitor the networks and provide intelligence to law enforcement and regulators.