US disrupts Xinbi Guarantee marketplace fueling the cyber scam economy
The U.S. government, in coordination with the U.K., has taken action against Xinbi Guarantee, a Telegram-based marketplace facilitating billions in cyber scam transactions. The Treasury Department seized $52.8 million in cryptocurrency and sanctioned two businesses linked to the platform, following a similar takedown of Huione Guarantee. The operation is part of a broader effort to combat cyber scams orchestrated by Chinese organized crime groups.
The U.S. government took action on Wednesday against Xinbi Guarantee, a Telegram-based illicit marketplace fueling the cyber scam economy. The Treasury Department announced sanctions on the Chinese-language platform, Xinbi Guarantee, and two businesses it accused of supporting the marketplace’s operations. The government also carried out a seizure of $52.8 million from 52 wallets connected to the platform. The sanctions follow a similar designation by the U.K. in March.
Xinbi’s main Telegram channel was no longer available on Wednesday and many associated usernames appeared to have been deactivated. According to a DOJ release, a district court on Monday authorized the seizure of Telegram channels hosting the marketplace. Xinbi has processed at least $24 billion in transactions, making it the second-largest illicit online marketplace in history, according to the blockchain intelligence firm Elliptic.
Vendors use its channels to offer everything from money laundering services to stolen personal data to deepfake technology, with all payments made through the platform in Tether’s USDT stablecoin. The marketplace acts as an escrow service, guaranteeing that providers are paid for their services. Xinbi grew out of the takedown by Telegram of Huione Guarantee following international pressure, which saw $31 billion in activity before it closed down. Despite pleas by researchers for Telegram to take action against Xinbi as well, it did not, and criminals gravitated to it.
According to the cyber intelligence company DarkTower, as of last week there were more than 4,600 crime-as-a-service vendors on the platform. The Treasury Department also went after two entities it accuses of assisting Xinbi’s operations — Anwen Technology, the Cambodia-based developer of a cryptocurrency payment app called XinbiPay, and SafeW Technology Co., maker of an encrypted messaging application allegedly used by Xinbi’s money-laundering and merchant networks.
While announcing the actions against Xinbi Guarantee, the DOJ said its strike force would “expand its scope to attack scam compounds globally” and had recently deployed a team to Madagascar to work with local law enforcement. The operation resulted in the takedown of 13 scam centers operated by Chinese organized crime syndicates and arrests of dozens of alleged leaders, who according to Pirro were “interestingly quickly repatriated to China.”
Xinbi administrators responded to Tether’s freezing of the funds by announcing that it would be moving to USDD, a stablecoin operating on the TRON blockchain that is harder to seize.