DOJ Seizes Scam Marketplace, Restrains $52M Crypto

The U.S. Department of Justice has successfully dismantled a significant cryptocurrency-funded scam marketplace, Xinbi Guarantee, seizing approximately $52 million in digital assets. This operation, led by the DOJ's Scam Center Strike Force in collaboration with the Treasury Department, targeted illicit services facilitating large-scale fraud schemes.

Xinbi operated primarily on Telegram, acting as a hub for vendors offering services such as building fraudulent investment websites, money laundering, and recruiting individuals for scam compounds. The marketplace's escrow system allowed investigators to trace victim funds directly to vendors by monitoring wallet addresses posted on the channel. Authorities seized two of Xinbi's primary crypto wallets, valued at $12 million, and placed restraint orders on an additional 47 wallets linked to the network.

The Treasury's Office of Foreign Asset Control (OFAC) concurrently designated Xinbi as a transnational criminal organization, freezing any U.S.-held assets. This action, alongside a separate operation in Madagascar targeting Chinese-run scam compounds, underscores the growing international scope of crypto-enabled financial crime and the evolving strategies of law enforcement agencies to combat it. The DOJ emphasized the broad risk these scams pose to the public.