U.S. Disrupts Xinbi Guarantee Scam Marketplace, Freezes $52.8 Million in Crypto

U.S. Disrupts Xinbi Guarantee Scam Marketplace 🚨

The U.S. Department of Justice (DOJ) announced coordinated actions against an illicit online marketplace known as Xinbi Guarantee. This marketplace offered various scam services, leading to the seizure of Telegram channels used for its operations and the confiscation of two cryptocurrency wallets. Additionally, the Scam Center Strike Force was deployed to Madagascar to disrupt 13 scam compounds run by Chinese organized crime syndicates.

Approximately $52 million in cryptocurrency was restrained in just one day, bringing the total restrained by the Scam Center Strike Force to around $938 million. The Treasury Department’s Office of Foreign Assets Control (OFAC) has also sanctioned Chinese-language media for facilitating cyber scams, fraud, money laundering, and other criminal activities targeting Americans. Secretary of the Treasury Scott Bessent stated, “Scam centers in Southeast Asia steal billions of dollars from American victims each year.”

Background on Xinbi Guarantee

Xinbi Guarantee is a Telegram-oriented marketplace that gained prominence after the closure of two similar storefronts, HuiOne Guarantee and Tudou Guarantee, last year. According to blockchain analytics firm Elliptic, which collaborated with the U.S. Secret Service, Xinbi is the second largest illicit marketplace, with $30 billion in transactions since its inception around 2022. Xinbi serves as an intermediary between vendors and scam center operators, facilitating various scams, including romance scams and custom scam investment websites.

In total, $52.8 million worth of cryptocurrency has been frozen from 52 wallets associated with Xinbi and its network of merchants. The Justice Department has announced plans to expand the scope of the Scam Center Strike Force to target scam center compounds globally, resulting in the takedown of 13 scam centers in Madagascar.

Historically, all payments on Xinbi have been made in Tether’s USDT stablecoin. Following the asset freeze, Xinbi has switched to USDD (“Decentralized USD”), another stablecoin. Dr. Tom Robinson, Elliptic’s Founder and Chief Scientist, noted that unlike USDT, which can freeze wallets, USDD has no central issuer or freezing capability, although its decentralization claims are contested.

Elliptic described these latest actions as a “severe setback” to the Guarantee marketplace ecosystem, undermining the trust that merchants and criminal users have in these marketplaces. The uncertainty surrounding wallet identification and freezing could significantly impact the operations of these services.

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