The U.S. Department of Justice has taken coordinated action against Xinbi Guarantee, an illicit online marketplace accused of providing services to scam operations around the world.
The operation included the seizure of Telegram channels used to operate the marketplace, two cryptocurrency wallets and the deployment of the Scam Center Strike Force to Madagascar, where authorities moved against 13 scam compounds allegedly operated by Chinese organized crime groups.
The Justice Department said approximately $52 million in cryptocurrency linked to scam money laundering was restrained in a single day, bringing the total amount restrained by the Scam Center Strike Force to about $938 million.
The Treasury Department’s Office of Foreign Assets Control has also sanctioned a Chinese-language media outlet over allegations that it facilitated cyber scams, fraud, money laundering and other criminal activity targeting Americans.
Xinbi Guarantee became one of the largest illicit marketplaces operating through Telegram after the closure of HuiOne Guarantee and its successor, Tudou Guarantee. According to blockchain analytics firm Elliptic, Xinbi has processed around $30 billion in transactions since it emerged around 2022, making it the second-largest illicit marketplace identified by the company.
The marketplace served as an intermediary between vendors and scam center operators, particularly those running so-called pig-butchering romance scams. Its services reportedly included creating customized investment scam websites, laundering money stolen from victims and helping recruit trafficking victims to work at scam compounds in Southeast Asia.
The Justice Department said Xinbi held payments between scammers and vendors until contracted services were completed, effectively providing an escrow-like system that helped criminal operators obtain services while giving vendors assurance that they would be paid.
Authorities also said Xinbi’s platform had reportedly been used by North Korean hackers and entities already sanctioned by OFAC, including Jin Bei Group and organizations linked to the Prince Group transnational criminal organization.
The Scam Center Strike Force seized two cryptocurrency wallets used by Xinbi to collect vendor payments. Those wallets reportedly contained around $12 million. Overall, authorities have frozen approximately $52.8 million worth of cryptocurrency from 52 wallets associated with Xinbi and its network of merchants.
The latest operation also expands the Justice Department’s focus beyond Southeast Asia, with the Scam Center Strike Force now targeting scam compounds globally. In Madagascar, the operation resulted in the takedown of 13 scam centers, the seizure of more than 3,200 electronic devices and investigations based on interviews with nearly 400 people who were arrested.
Authorities said around 30 Chinese leaders of the scam compounds have been repatriated to China by the Chinese government.
Xinbi’s operations have historically relied on Tether’s USDT stablecoin, primarily on the TRON blockchain. Following the asset freezes, the marketplace reportedly began shifting some of its remaining funds to USDD, another dollar-pegged stablecoin. Elliptic estimates that Xinbi converted about $2.8 million in remaining USDT into USDD through a decentralized exchange.
Elliptic said the latest action represents a major setback for the illicit marketplace ecosystem because criminal users and merchants can no longer assume that their cryptocurrency wallets will remain beyond the reach of law enforcement.
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The company also warned that Xinbi could potentially attempt to return under a different name, similar to how Huione Guarantee was followed by Tudou Guarantee. However, Elliptic said the latest enforcement action could make it difficult for Xinbi to survive even after a possible rebranding.
U.S. Seizes $52.8 Million in Crypto Linked to Global Scam Marketplace
