Shares in London-listed online payment systems provider Paysafe Group plunged almost 38% yesterday following an accusation that some of its outsourced services have been facilitating “both illegal gambling and Chinese capital control evasion” for one of its largest customers. The stock peaked at 380.60 at 10am Tuesday, fell to 273 by noon, and was recovering with a price of 330 at 4:30 pm Wednesday.

According to a report from the Reuters news service, short-selling firm Spotlight Research made the accusation on Tuesday while additionally claiming that Paysafe Group could face the risk of “criminal prosecution and sanctions” in the United Kingdom and see its Chinese operation shut if it is shown to have been enabling illegal gambling in the country.

“Paysafe [Group] appears to be enabling both illegal gambling and Chinese capital control evasion through undisclosed related parties run by recent former executives,” read the Spotlight Research allegation as cited by Asia Gaming Brief. “Paysafe [Group] is headquartered and listed in the United Kingdom and may face risk of criminal prosecution and sanctions by the Financial Conduct Authority while the Chinese business, [which accounts for] an estimated 50% of earnings, may be at risk of being shut down by Chinese authorities.”

Spotlight Research reportedly explained that Paysafe Group’s largest customer, which it alleged is British online sportsbetting operator Bet365 Group Limited, represents around half of the firm’s earnings and runs an online business that “appears to facilitate and engage in illegal gambling” for Chinese customers and can “potentially be used to evade Chinese capital controls”.

Alliance News reported that Paysafe Group admitted an “indirect material revenue dependency” on the Chinese online gambling market stemming from the operations of Bet365 Group Limited in December of 2015.

Spotlight Research reportedly pointed to the online payment systems provider’s Quick Access e-wallet operation, which was closed over regulatory concerns in 2010. The short seller alleged that this innovation’s main product, the 1-Pay digital service, had continued to run to the end of 2014 under the control of a firm headed by Joyce Wong, former Asia Operations Director for Paysafe Group, and allowed Chinese players to avoid capital control regulations such as limits on foreign exchange.

Although this company was purportedly closed by Chinese authorities last year, Spotlight Research contends that a new organization named Hamber Services had subsequently been established by Paysafe Group executive Eric Sherritt in order to provide a similar service. The report claims that Sherritt left the online payments firm in October of 2015 only two days after becoming a director for the new entity.

Spotlight Research moreover claimed to have identified additional online gambling operations run by customers of Paysafe Group that were targeting the Chinese market and players in other nations where gambling may be illegal such as India.

However, Paysafe Group has vociferously denied the allegations and declared that it had a history of “significant [and] transparent disclosure to the market”. The company proclaimed that it had published “two prospectuses in 2015” and had been “subject to substantial additional scrutiny through a full United Kingdom Listing Authority listing process as part of its move to the main market of the London Stock Exchange”.