DOJ Restrains $52 Million in Crypto Tied to Chinese Scam Marketplace Xinbi

U.S. law enforcement agencies froze approximately $52 million in cryptocurrency linked to Xinbi Guarantee, a Chinese‑language marketplace operating on Telegram that facilitates fraud services. The action was coordinated with the Secret Service, Treasury’s Office of Foreign Assets Control (OFAC) and private blockchain analytics firm Elliptic.

Background on Xinbi Guarantee

Xinbi Guarantee is described as a marketplace that advertises custom fraud websites, money‑laundering services and recruitment for compounds in Southeast Asia. Elliptic’s tracking identified at least $24 billion in transactions processed through the platform since 2022, making it the second‑largest operation after the now‑defunct Huione Guarantee, which handled $31 billion.

Financial Flow and Assets

The majority of Xinbi’s activity involved Tether (USDT) on the TRON blockchain. A related payments arm, Xinbi Pay, processed an additional $6 billion. After the freeze, Xinbi attempted to move roughly $2.8 million of remaining USDT into the stablecoin USDD, which lacks an issuer‑freeze mechanism, though USDD is partially backed by USDT and remains vulnerable to freezing.

Law Enforcement Actions

• The Department of Justice seized two Xinbi payment wallets containing about $12 million and targeted 47 additional wallets.
• OFAC designated Xinbi as a Significant Transnational Criminal Organization and sanctioned two supporting entities.
• U.S. authorities also conducted a deployment in Madagascar, dismantling 13 Chinese‑run compounds and arresting nearly 400 individuals, while processing over 3,200 devices.

Responses and Implications

Xinbi condemned the freeze as “arbitrary” and announced plans to compensate customers. The incident highlights the reliance of guarantee marketplaces on trust and the risk that deposits can be seized without warning.