China’s central bank vowed to crack down on payment services providers who channel funds for illegal cross-border gambling, and also to fix existing loopholes in the scandal-ridden industry.

Cutting off the channels that provide funds for illegal gambling is a crucial task in preventing and defusing major financial risks and is a national security issue, Fan Yifei, a deputy governor of the People’s Bank of China (PBOC), said at a meeting with several central government departments and major stakeholders in the payment industry, according to a PBOC statement (link in Chinese) on Thursday.

The statement follows moves to tighten regulatory oversight of payment services providers in recent years, including in areas like how they work with illegal businesses and the embezzling of clients’ funds. In April, the PBOC Beijing branch imposed a record-high penalty on Allscore Payment Service, a Beijing-based payment company, for its involvement in illegal gambling.

At the meeting, Fan pledged to hold those companies that serve clients involved in illegal activities accountable and urged industry players to strengthen client identification, reporting of large and suspicious dealings, and identification of people withdrawing funds from accounts.

Read the full story on Caixin Global later today.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com)

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