AppLovin just escalated its war with short-sellers, slapping CapitalWatch with a cease and desist letter that calls the firm's money laundering allegations "conspiratorial musings." The adtech company is demanding a full retraction of last week's explosive 35-page report claiming AppLovin serves as a "digital laundromat" for criminal syndicates. It's the latest salvo in a year-long battle that's seen multiple short-sellers take aim at the company's business practices and connections.
AppLovin isn't taking the latest short-seller attack lying down. The mobile advertising platform fired off a cease and desist letter to CapitalWatch on Monday, flatly rejecting allegations that it operates as a money laundering operation for criminal networks. The letter demands CapitalWatch retract its 35-page report published last week, which claimed to have uncovered "systemic compliance risks and suspicions of major financial crimes" buried in AppLovin's capital structure.
"Your respective 'reports' contain numerous absurd and demonstrably false statements of purported fact about AppLovin," the legal letter states, dismissing CapitalWatch's findings as "conspiratorial musings" according to CNBC reporting. The company also instructed CapitalWatch to preserve all documents and communications related to AppLovin, a standard legal move that signals potential litigation ahead.
The CapitalWatch report centers on alleged connections between Hao Tang, a major AppLovin shareholder, and Chen Zhi, chairman of Cambodia-based Prince Group. That name should ring alarm bells - the U.S. Department of Justice charged Chen Zhi with wire fraud conspiracy and money laundering conspiracy in October, simultaneously seizing roughly $15 billion in bitcoin from his cryptocurrency wallets. The U.S. Treasury didn't mince words either, officially designating Prince Group as a the same day.
