US Seizes Xinbi Guarantee Scam Operations, Freezes $52.8M

On Wednesday the U.S. Department of Justice announced coordinated action against an illicit online marketplace called Xinbi Guarantee, seizing Telegram channels and confiscating two cryptocurrency wallets that together hold $52.8 million in digital currency.¹

Xinbi is a Chinese cryptocurrency used to facilitate illicit transactions due to its anonymity features; freezing these wallets represents an attempt at disrupting the flow of funds within this ecosystem and may require further investigation into associated exchanges or mixers where it’s traded for more traceable assets like Bitcoin (BTC). This follows similar efforts by U.S. authorities against other virtual‑currency platforms facilitating scams such as BitConnect which was shut down around 2019 with over $3 billion lost—the scale here indicates continued growth despite previous interventions.

The operation deployed the Scam Center Strike Force—an initiative launched last year to counter Chinese organized crime—to Madagascar to help disrupt 13 scam compounds run by the group.

Telegram’s end‑to‑end encryption has historically attracted fraudsters because tracing activity is difficult even when law enforcement obtains warrants abroad. Seizing the channels removes their primary communication channel, though funds often travel through mixers or convert into stablecoins, making recovery challenging unless exchanges can be traced back to initial purchases.¹

Experts note that freezing crypto assets is only one step; investigators will likely need to follow transactions on blockchains and identify any linked exchanges or mixer services. This mirrors Europol’s earlier seizure of OGBlackMarket involving €60 million. While the freeze stops further movement, full restitution depends on deeper forensic work.¹

The crackdown underscores growing U.S. focus on cryptocurrency‑based scams and highlights how encrypted messaging apps continue to serve as conduits for illicit operations. As authorities tighten controls, scammers may shift tactics toward newer platforms or more sophisticated obfuscation techniques.¹