Federal Prosecutors Target Scam Platform, Freezing $52 Million in Cryptocurrency Assets

Federal authorities have dismantled a major Chinese-language scam marketplace operating on Telegram, seizing and restraining over $52 million in cryptocurrency in a single coordinated action. The takedown reflects an expanding crackdown on transnational fraud networks that extends far beyond Southeast Asia into Africa, with law enforcement signaling an aggressive posture toward cross-border criminal organizations.

• DOJ restrained $52 million in crypto from Xinbi Guarantee, bringing Strike Force total to $938 million since November 2025
• Xinbi operated as escrow marketplace on Telegram, connecting scam operators with vendors offering fraud services and money laundering
• Simultaneous Madagascar operation dismantled 13 Chinese-run compounds, processing over 3,200 devices and interviewing 400 arrested individuals

• $52M Total crypto seized and restrained from Xinbi in single operation
• $938M Cumulative amount restrained by Strike Force since its November 2025 founding
• $20B Estimated crypto processed by Xinbi between 2021 and 2025, per Chainalysis
• 89% Year-over-year increase in reported crypto investment fraud losses from 2023 to 2025

The Justice Department’s Scam Center Strike Force, operating in coordination with the Treasury Department, executed a seizure of Xinbi Guarantee this week, halting operations of a marketplace that had served as a critical infrastructure node for international fraud networks. U.S. Attorney Jeanine Pirro announced the action, which resulted in the restraint of approximately $52 million in cryptocurrency tied to the platform and its vendor network. The operation marks the Strike Force’s largest single action since its establishment in November 2025, and pushes cumulative restraints across the unit’s enforcement efforts to roughly $938 million.

The Strike Force emerged as a specialized federal response to the explosive growth of cryptocurrency-enabled fraud schemes, particularly those originating from organized crime networks in Asia. Since its creation, the unit has focused specifically on dismantling the infrastructure supporting international scam operations, targeting not just individual perpetrators but the platforms and service providers that enable mass fraud schemes to operate at scale. The Xinbi action represents a significant escalation in this enforcement strategy, targeting a central marketplace rather than peripheral operators.

Xinbi’s telegram-based escrow model connected scammers with specialized vendors

Xinbi operated almost entirely through Telegram channels conducted in Chinese, functioning as an online marketplace where criminal operators could purchase specialized fraud services. Vendors advertised offerings including the construction of fraudulent investment websites, money laundering services to clean wire fraud proceeds, and recruitment of trafficking victims to staff scam compounds. The platform held payments in escrow until vendors completed work, a structure that allowed federal prosecutors to trace specific victim funds back to individual vendors through blockchain analysis of wallet addresses posted on the channel.

This infrastructure-focused model represented an evolution in organized fraud operations. Rather than individual scammers working independently, Xinbi created a specialized division of labor where different criminal enterprises could outsource specific functions to providers with particular expertise. Money launderers worked alongside website developers, while recruiters connected fraud operations with human trafficking networks. This compartmentalization helped insulate individual operators from law enforcement while creating multiple chokepoints that authorities could potentially exploit.

A federal court in Washington authorized the seizure of Xinbi’s Telegram channels on September 7, and prosecutors unsealed the warrant on Wednesday. Investigators seized two crypto wallets used by Xinbi to collect vendor payments, valued at approximately $12 million, and obtained court restraint orders affecting 47 additional wallets connected to the network, bringing total seizures and restraints past $52 million. On the same day, the Treasury Department’s Office of Foreign Asset Control designated Xinbi as a transnational criminal organization, along with two other entities accused of supporting it, effectively freezing any assets those groups hold within U.S. jurisdiction.

Every American with a retirement account is in the blast radius. My Strike Force will continue to dismantle Chinese organized crime, those who facilitate it, and protect Main Street America.

Jeanine Pirro, U.S. Attorney

Madagascar deployment expands crackdown beyond Southeast Asia into africa

Concurrent with the Xinbi seizure, the Strike Force conducted a two-week deployment to Madagascar in coordination with local authorities, dismantling 13 Chinese-run scam compounds. The operation processed more than 3,200 devices and involved interviews with approximately 400 individuals who had been arrested in connection with the compounds. U.S. Attorney Michael Heyman of Alaska, commenting on the Madagascar action, stated the effort demonstrates law enforcement’s willingness to pursue transnational criminal organizations across sovereign borders.

The Madagascar operation reveals how scam networks have diversified their geographic footprint beyond traditional Southeast Asian hubs in Thailand, Cambodia, and Laos. By establishing compounds in less scrutinized jurisdictions, criminal organizations reduce exposure to international law enforcement pressure while maintaining access to labor and infrastructure. The compounds typically employ dozens of fraud workers in shifts, with some facilities housing hundreds of individuals in conditions frequently characterized as exploitative and involving elements of human trafficking.

The Madagascar operation signals a geographic expansion of enforcement activity that was initially concentrated in Southeast Asia when the Strike Force launched in November 2025.

Xinbi persisted for years despite prior international sanctions

Xinbi had operated continuously since at least 2021, surviving previous enforcement action without significant operational disruption. The British government sanctioned the platform in March, with blockchain analytics firm Chainalysis estimating it had processed nearly $20 billion in cryptocurrency between 2021 and 2025. The platform’s offerings ranged widely across the criminal marketplace, including stolen personal data, satellite equipment used to target fraud victims, and other illicit goods and services.

After the British sanctions in March, Xinbi responded by opening new Telegram channels and resuming operations with minimal interruption. The platform’s resilience underscores the challenge law enforcement faces in disrupting distributed communications networks. However, federal prosecutors expressed confidence that the September seizure, combined with financial restraints and the OFAC designation, would produce more durable results than previous action by constraining the platform’s ability to access international financial systems and banking relationships.

The combination of asset restraint and designations as a transnational criminal organization represents a more comprehensive enforcement strategy than earlier sanctions efforts. By seizing active wallets and restraining related cryptocurrency holdings, authorities aim to eliminate the financial reserves necessary for the platform to reconstitute itself quickly or compensate members affected by the disruption.

Reported crypto investment fraud losses reached $8.65 billion in 2025, representing an 89% increase from $4.57 billion in 2023, though the FBI has indicated these figures significantly undercount actual losses due to low victim reporting rates.

The Strike Force’s next priority remains targeting additional Chinese organized crime networks operating scam centers, with the rapid expansion from Southeast Asia to Madagascar suggesting prosecutors are identifying and acting against additional compounds at an accelerating pace. Whether the Xinbi seizure and OFAC designation prove sufficient to prevent reconstitution of the platform through new Telegram channels, as occurred following March sanctions, remains an open question that will test the durability of the federal enforcement strategy.

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