DOJ Restrains $52M in Crypto From Transnational Criminal Organization
The DOJ seized the Telegram infrastructure of Xinbi Guarantee, a Chinese-language illicit marketplace, and restrained roughly $52 million in cryptocurrency from Xinbi and its vendor network. OFAC designated Xinbi and two supporting entities the same day.
According to a seizure warrant unsealed in the U.S. District Court for the District of Columbia, the organization operated a Chinese-language illicit marketplace on Telegram where vendors marketed services to scam center operators. The DOJ alleged that the network facilitated the creation of custom scam investment websites, the laundering of funds obtained from U.S. wire-fraud victims, and the recruitment of trafficking victims for scam compounds in Southeast Asia. The DOJ stated that investigators traced U.S. victim funds to specific vendors who advertised money laundering services and posted cryptocurrency wallets for payment on the channel.
OFAC designated Xinbi as a significant transnational criminal organization under Executive Order 13581 ("Blocking Property of Transnational Criminal Organizations"), as amended. The agency designated two supporting entities, one based in Singapore and the other in Cambodia, as materially assisting Xinbi. All property and interests in property of the three entities in the United States or held by U.S. persons are blocked. The DOJ did not announce criminal charges against specific individuals, executing the action through civil seizure and forfeiture proceedings.
Pursuant to the warrant, the DOJ seized the Telegram channels and two cryptocurrency wallets used to collect vendor payments, which held approximately $12 million. Law enforcement also sought restraint of 47 additional wallets believed to be associated with money laundering on Xinbi's network and with vendors who worked for scammers. The coordinated efforts restrained more than $52 million in one day.
Treasury said the action furthers Executive Order 14390 ("Combating Cybercrime, Fraud, and Predatory Schemes Against American Citizens"). The DOJ separately described its Scam Center Strike Force as a critical node in executing the mission outlined in that order. The DOJ added that a Strike Force team spent two weeks in Madagascar assisting local authorities in taking down 13 scam centers run by Chinese organized crime syndicates. Local authorities made nearly 400 arrests. Roughly 30 of those arrested were Chinese leaders of the compounds, whom the Chinese government repatriated to China.