U.S. authorities have seized a Chinese-language online marketplace allegedly used by criminal networks to obtain services for cryptocurrency scams and money laundering, while restraining more than $52 million in cryptocurrency linked to the network.
The action was announced on September 9 by the U.S. Attorney’s Office for the District of Columbia as part of the Department of Justice’s Scam Center Strike Force. The operation targeted Xinbi Guarantee, a Telegram-based marketplace that allegedly connected scam operators with vendors offering services including the creation of fraudulent investment websites, cryptocurrency laundering and recruitment of workers for scam compounds in Southeast Asia. According to a seizure warrant unsealed in federal court, Xinbi operated primarily in Chinese and facilitated transactions between scam operators and service providers. Investigators traced funds stolen from U.S. fraud victims to cryptocurrency wallets advertised by vendors on the platform.
Authorities seized two cryptocurrency wallets used by Xinbi to collect payments, containing about $12 million. They also sought to restrain 47 additional wallets believed to be associated with money laundering through the network. The combined action brought the cryptocurrency restrained by the Strike Force to approximately $938 million. Tether assisted investigators with the operation. Separately, the Treasury Department’s Office of Foreign Assets Control designated Xinbi as a significant transnational criminal organization and sanctioned two entities accused of supporting it. The Strike Force also expanded its international operations, deploying personnel to Madagascar for two weeks to assist local authorities in dismantling 13 Chinese-run scam compounds. Investigators processed more than 3,200 electronic devices and interviewed nearly 400 people arrested during the crackdown. The DOJ said the initiative will increasingly target scam-center networks and their financial infrastructure beyond U.S. borders.