Home / Crime and Justice / FTC Sues App Network for $700M Subscription Fraud
FTC Sues App Network for $700M Subscription Fraud
18 Jun
Summary
- FTC alleges Genesis Tech used shell companies to hide assets.
- Network of five companies generated nearly $250 million in revenue.
- Over $700 million processed through connected PayPal accounts in one year.
A new lawsuit by the U.S. Federal Trade Commission (FTC) exposes the difficulty in policing app stores for fraudulent activities. The commission alleges that Genesis Tech defrauded consumers by routing revenues through overseas shell companies to conceal its identity and assets. This network included subsidiaries in Cyprus and operations in Ukraine, marketing apps like fitness, fashion, and productivity tools to U.S. consumers.
Five of Genesis Tech's brands alone reportedly generated nearly $250 million in global revenue from early 2023 to mid-2025. Furthermore, in the twelve months ending in September 2025, transactions through the company's connected PayPal accounts totaled close to $700 million. The suit claims Genesis Tech created new corporate entities and merchant accounts to evade fraud monitoring for years.
The practices of Genesis Tech, which included making it easy to sign up for subscriptions but difficult to cancel, are alleged to violate the FTC Act and the Restore Online Shoppers' Confidence Act (ROSCA). The FTC's complaint also names several individuals as co-defendants. This case is being pursued in the U.S. District Court for the Northern District of California.
