Exclusive: Sen. Cotton asks Treasury to investigate Airwallex's China ties, seek divestiture
Sen. Tom Cotton. Bill Clark/Getty Images
Sen. Tom Cotton (R-Ark.) on Wednesday urged Treasury Secretary Scott Bessent to investigate payments unicorn Airwallex over its Chinese ties and potentially seek divestments, according to a letter seen by Axios.
The big picture: It's the second major move Cotton has made against the Australia-founded and San Francisco-based company, whose founder is a Chinese-born, naturalized Australian citizen.
Driving the news: "I urge [CFIUS] to examine the Chinese investments in Airwallex," the letter reads. "If the review confirms the risks, CFIUS should seek the company's divestment of the Chinese stakes."
- The longtime China hawk pointed to a Forbes article citing VC Keith Rabois' allegations that China-based Tencent and HongShan (formerly Sequoia Capital China) own over 20% of the company. Rabois is on the board of Airwallex rival Ramp.
- Cotton notes the company's China offices as a risk, saying China's 2017 National Intelligence Law requires employees there "to assist Chinese intelligence services."
- "While Airwallex markets itself as an Australian company, its ties to Communist China run deep," Cotton writes.
Follow the money: Airwallex recently was valued at $12 billion in a venture capital round led by U.S.-based firm Addition.
- Other investors include Visa, Salesforce and T. Rowe Price.
Context: Cotton also penned a letter in December to the Department of Justice, requesting an investigation into whether Chinese officials were accessing Airwallex's data.
What they're saying: Airwallex CEO Jack Zhang has called such allegations conspiracy theories, led by "a board member of one of Airwallex's direct competitors."
- Earlier this month, he pushed back against allegations that Chinese stakeholders owned such a large stake, saying Tencent and HongShan each hold less than 10% of the company.
- U.S. customer data is stored stateside, and China-based employees have no access to it, he wrote in a blog post.
- Company spokesperson Rachael Horwitz tells Axios: "As part of our ongoing dialogue with policymakers, we welcome the opportunity to share the facts about who we are, how we operate, and the standards we uphold. We are confident that once presented with the full picture, Senator Cotton and his team will understand the strength of our commitment to security, transparency, and American businesses."
Between the lines: Cotton's office is taking the approach of "where there's smoke, there's fire," senior policy staff say. The letter cites no direct proof that Airwallex is funneling information on U.S. citizens to Chinese Communist Party officials.
- While several other payments companies also have operations in China, Cotton is singling out Airwallex over reports that it processes payments in the defense and AI sectors, those staff say.
- Te DOJ letter says that it processes data for Anthropic and Anduril, although Airwallex says that neither company is a customer.
