DOJ Seizes $52M in Crypto from Chinese Scam Marketplace
US authorities dismantle transnational fraud network operating via Telegram.
1Massive Scam Network Disrupted
The DOJ's Scam Center Strike Force seized Xinbi Guarantee, a Chinese-language Telegram-based marketplace facilitating fraud services. Authorities restrained $52M in crypto linked to the platform, bringing total recoveries to $938M since the unit's 2025 launch. Parallel operations in Madagascar shut down 13 Chinese-run scam compounds, expanding the crackdown beyond Southeast Asia.
2Xinbi's Criminal Marketplace
Xinbi operated as an escrow service for fraud vendors, offering services like building fake investment sites and laundering stolen funds. Prosecutors traced victim payments to wallet addresses posted on Telegram channels. On September 7, a Washington court authorized seizing these channels, with warrants unsealed days later.
3$12M Wallets Seized
Investigators confiscated two crypto wallets worth $12M used by Xinbi for vendor payments. They also sought restraint orders for 47 additional wallets tied to the network, totaling over $52M in frozen assets. OFAC simultaneously designated Xinbi as a transnational criminal organization, freezing all US-based assets.
4Madagascar Operation Expands Reach
A separate Strike Force team assisted Madagascan authorities in dismantling scam compounds, processing 3,200 devices and interviewing 400 arrestees. US Attorney Heyman emphasized the borderless nature of these crimes, signaling global enforcement priorities. The operation reflects the unit's expansion beyond its initial Southeast Asia focus.
5Xinbi's $20B Fraud History
Chainalysis data revealed Xinbi processed nearly $20B in crypto between 2021-2025, trading stolen data and fraud equipment. Despite UK sanctions in March 2025, the group simply migrated to new Telegram channels. This resilience highlights challenges in combating decentralized cybercrime networks.
6Soaring Crypto Fraud Losses
DOJ cited 2025 crypto investment fraud losses at $8.65B, an 89% increase from 2023's $4.57B. The FBI notes these figures are likely underreported, as most victims don't come forward. Attorney Pirro warned all Americans with retirement accounts are potential targets in these sophisticated schemes.
7Strike Force's Evolving Tactics
Launched in November 2025 specifically targeting Chinese scam centers, the unit combines wallet seizures, platform takedowns, and international collaboration. The Xinbi case demonstrates how prosecutors trace funds through escrow systems, while the Madagascar deployment tests real-time cross-border coordination.
8Global Implications
This operation sets precedents for combating crypto-enabled transnational crime. The simultaneous OFAC designation and wallet seizures create a multi-pronged financial stranglehold. However, the ease with which groups like Xinbi regenerate highlights the need for ongoing technological and legal innovation in fraud prevention.
Original article: CryptoPotato — DOJ Seizes $52M in Crypto from Chinese Scam Marketplace