- U.S. authorities seized Telegram channels and froze $52.8 million in cryptocurrency linked to Xinbi Guarantee, a marketplace serving Southeast Asian scam centers.
- The coordinated action between the DOJ, Treasury, and Secret Service targeted “pig butchering” romance scams and money laundering networks.
- Xinbi responded to the asset freeze by switching to USDD, a stablecoin without central freezing capabilities, though experts question its decentralization claims.
The U.S. Department of Justice on Wednesday announced coordinated actions against Xinbi Guarantee, a Telegram-based marketplace that provided scam services to Southeast Asian criminal enterprises, resulting in the seizure of Telegram channels and the disruption of 13 scam compounds in Madagascar. The Scam Center Strike Force confiscated two cryptocurrency wallets and restrained approximately $52 million in a single day, bringing the total restrained to about $938 million, according to the DOJ.
Consequently, the Treasury Department’s OFAC sanctioned Chinese-language media for facilitating cyber scams and money laundering targeting Americans. Blockchain analytics firm Elliptic, which worked with the U.S. Secret Service to freeze wallets holding $52.8 million in Tether’s USDT, identified Xinbi as the second largest illicit marketplace of its kind, with $30 billion in transactions since 2022.
Xinbi Guarantee acted as an intermediary between vendors and scam center operators running “pig butchering” romance scams, offering services such as custom scam websites and fund laundering. The DOJ stated that “Xinbi as an organization holds money to be paid to the vendor until the vendor’s services are complete” to ensure vendor performance.
The platform was reportedly used by North Korean hackers and OFAC-designated entities. Following the asset freeze, Xinbi responded by switching to USDD, another stablecoin without central freezing capabilities. However, Elliptic’s Dr. Tom Robinson noted that USDD “is partly collateralized with freezable USDT”, exposing it to freezing risk.
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