Meta Generates $3 Billion from Chinese Fraudulent Ads Including Illegal Gambling Content

Meta Platforms earned over $3 billion in 2024 from Chinese advertisements promoting scams, illegal gambling operations, pornography, and other prohibited content, according to internal company documents reviewed by Reuters.

The social media giant’s China advertising business reached $18 billion in annual sales during 2024, accounting for more than 10% of Meta’s global revenue. Internal calculations show approximately 19% of that revenue—more than $3 billion—came from advertisements violating Meta’s own content policies.

China Identified as Top “Scam Exporting Nation”

Meta’s internal documents identify China as the country of origin for roughly 25% of all scam and banned-product advertisements appearing on Facebook, Instagram, and WhatsApp globally. The company’s analysis found that fraud rates on its platforms decline worldwide during China’s Golden Week holiday in October, when hundreds of millions of Chinese citizens travel domestically.

While Chinese citizens cannot access Meta’s platforms due to government restrictions, Beijing permits Chinese companies to advertise to international audiences through Facebook and Instagram. This arrangement has created a major revenue stream for Meta, with China ad sales more than doubling from $7.4 billion in 2022 to $18.4 billion in 2024.

Anti-Fraud Team Disbanded After Brief Success

Meta formed a dedicated anti-fraud team in 2024 after internal staff warned that "significant investment to reduce growing harm" was needed. The team reduced problematic Chinese advertisements from 19% to 9% of total China ad revenue during the second half of 2024.

The enforcement effort was halted when the team was "asked to pause" its work "as a result of an Integrity Strategy pivot and follow-up from Zuck," referring to Meta CEO Mark Zuckerberg, according to internal documents. The anti-fraud team was subsequently disbanded, and Meta lifted restrictions on new Chinese advertising agencies accessing its platforms.

By mid-2025, fraudulent advertisements had rebounded to approximately 16% of China revenue. Internal documents indicate Meta management decided to "maintain the % of global harm" from China rather than achieve parity with advertising quality standards in other markets.

Complex Agency Network Enables Fraud

Meta sells most Chinese advertisements through 11 major agency partners, designated as "top tier resellers." These agencies both sell ads directly and recruit smaller second-tier agencies, creating multiple layers of intermediaries between Meta and actual advertisers.

A report commissioned by Meta from London-based consultancy Propellerfish warned that the company’s own policies were fostering "systemic corruption" in the Chinese advertising market. The analysis found Meta’s enforcement was weaker compared to competitors including TikTok and Google.

Internal documents reveal that more than 75% of harmful ad spending came from accounts protected under Meta’s partner system. When enforcement staff proposed shutting down fraudulent accounts, they first checked whether growth teams would object "given the revenue impact."

Criminal Schemes Target International Victims

In March 2025, federal prosecutors in Illinois reported that the FBI seized $214 million from promoters of a Chinese stock scam operation that used Facebook and Instagram advertisements to recruit victims. The scheme directed users into WhatsApp groups managed by individuals posing as U.S.-based investment advisors. Seven people from Taiwan and Malaysia were charged in connection with the fraud.

Meta’s internal safety staff estimated the company’s platforms were involved in roughly one-third of all successful scams in the United States, linked to more than $50 billion in consumer losses.

Company Responds to Investigation

Meta spokesperson Andy Stone stated that the China-focused anti-fraud team was always intended as temporary and denied that Zuckerberg ordered its shutdown. "Mark’s guidance to the teams responsible for addressing high-risk harms, such as fraud and scams, was to redouble efforts to reduce them all across the globe, including in China," Stone said.

Stone added that Meta removed 46 million Chinese-submitted advertisements over 18 months and has reduced commissions or cut ties with Chinese partners who generated too many policy violations.

“Scams are spiking across the internet, driven by persistent criminals and sophisticated, organized crime syndicates constantly evolving their schemes to evade detection. We are focused on rooting them out by using advanced technical measures and new tools, disrupting criminal scam networks, working with industry partners and law enforcement, and raising awareness on our platforms about scam activity.”

Regulatory Scrutiny Intensifies

The revelations follow a Reuters report from last month showing Meta earns approximately $7 billion annually from advertisements it classifies as "high risk," with 10% of the company’s 2024 revenue—roughly $16 billion—projected to come from scam ads, illegal gambling, and banned products.

U.S. Senators Josh Hawley (R-MO) and Richard Blumenthal (D-CT) have called on the Federal Trade Commission and Securities and Exchange Commission to investigate and pursue enforcement actions against Meta for its alleged role in facilitating criminal investment scams, fake government benefits schemes, deepfake pornography, and other fraudulent activities.

Rob Leathern, former Meta executive who led business integrity operations until 2019, told Reuters the scale of fraud was indefensible. "The levels that you’re talking about are not defensible. I don’t know how anyone could think this is okay," Leathern stated.

Source: Reuters