The U.S. Department of Justice (DoJ) made an announcement on Wednesday regarding coordinated actions taken against an illicit online marketplace known as Xinbi Guarantee. These actions included seizing Telegram channels used by the service, confiscating two cryptocurrency wallets, and deploying the Scam Center Strike Force to Madagascar to disrupt 13 scam compounds run by Chinese organized crime syndicates.
According to the DoJ, approximately $52 million of cryptocurrency related to scam money laundering was restrained in a single day, bringing the total amount restrained by the Scam Center Strike Force to nearly $938 million. Additionally, the Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned Chinese-language media for facilitating cyber scams, fraud, money laundering, and other criminal activities targeting Americans.
Xinbi Guarantee, a Telegram-oriented marketplace, gained prominence after the closure of similar storefronts like HuiOne Guarantee and Tudou Guarantee. It acts as an intermediary between vendors and scam center operators, offering various services such as creating custom scam investment websites, laundering funds obtained through wire fraud, and recruiting trafficking victims to work in scam compounds in Southeast Asia.
Elliptic, a blockchain analytics firm, collaborated with the U.S. Secret Service to identify and freeze wallets holding $52.8 million in Tether’s USDT stablecoin. Xinbi Guarantee is reported to be the second-largest illicit marketplace, with transactions totaling $30 billion since its inception around 2022.
The latest actions against Xinbi Guarantee have been described as a significant setback to the Guarantee marketplace ecosystem by Elliptic. The trust that merchants and criminal users have in these marketplaces has been undermined, as there is now a risk of wallets being identified and frozen at any time.
Overall, the efforts by the DoJ and other agencies aim to dismantle overseas criminal enterprises operating scam centers and protect American victims from financial fraud. The Scam Center Strike Force will continue to target scam center compounds globally, with recent success in disrupting operations in Madagascar and repatriating Chinese leaders of scam compounds back to China.
