China’s Ant Group, a leading fintech company, has been fined close to $1 billion for “illegal acts,” according to the country’s financial regulators. The penalty, which includes the confiscation of illegal income, marks the culmination of a prolonged crackdown on tech firms.
The China Securities Regulatory Commission (CSRC) stated that most of the financial issues pertaining to platform enterprises have been resolved. Ant Group operates Alipay, the world’s largest digital payments platform, with a vast user base in China and beyond.
This crackdown on the tech sector has drawn attention to Ant Group as one of the primary targets. Following reports of the impending fine, Alibaba’s shares rose by 3.44% in Hong Kong, with investors interpreting the penalty as a signal that the crackdown was nearing its end.
Ant Group pledged to comply with the terms of the penalty and enhance their compliance governance. The fine addresses various areas, including corporate governance, financial consumer protection, business activities with banking and insurance institutions, payment and settlement services, anti-money laundering obligations, and the development of fund sales business.
Over the years, Ant Group expanded its services to include loans, credit, investments, and insurance for millions of individuals and small businesses. The government’s objective has been to regulate personal debt and lending practices in the private sector. Ant Group’s rapid growth posed a challenge to established interests in China’s state-dominated financial domain.
In 2020, the company’s planned record-breaking $35 billion Hong Kong-Shanghai initial public offering (IPO) was abruptly halted by regulators due to non-compliance with new capital requirements.
