"Nobody has any real clarity about what's going on in China," Calacanis said Tuesday on CNBC's "Squawk Alley." "Remember, this isn't even a democracy. And you have a company hanging out there, sort of growing in a large way, that the SEC is trying to figure out what's going on."
Alibaba provided information to the Securities and Exchange Commission about its accounting for logistics unit Cainiao Network as well as operating data from its Singles Day shopping extravaganza, the company announced in its annual report last month. A company spokesperson called the move "exactly the kind of robust and transparent information that will address the underlying issues in SEC's inquiry."
But Calacanis has his doubts, saying he believes China's economy "has many thumbs on the scale, and a lot of manipulation, and a ton of corruption," citing the lack of free press protection under the Chinese Communist Party.
Alibaba did not immediately respond to a CNBC request for comment about Calacanis' statements.
Calacanis, who has invested in e-commerce, customer relations and advertising start-ups, according to AngelList, isn't the first to hesitate when it comes to the internet retailing giant.
"I think it's a really tough one," Gil Luria, a technology analyst at Wedbush Securities, told CNBC's "Power Lunch" last month. "The flipside of what we're talking about is this is a company that just grew 40 percent and is only trading at 20 times [earnings] .... there's the underlying concerns with China, there's concerns about inflated volumes, there's concerns about the competitive situations vis-a-vis JD.com."
Chinese e-commerce platform JD.com last year accused Alibaba of anticompetitive behavior, calling for a regulatory investigation over Alibaba's relationships with vendors, in a bitter rivalry some have called "malicious."
As Chinese companies move to adopt more of an American-style transparency model, Calacanis said he'll be eyeing Alibaba as the test case.
"It's a very challenged environment," Calacanis said. "You have to be a high risk investor, you have to be very careful owning the stock. I would only own it under a small, small percentage of your overall diversified portfolio."