The cryptocurrency messaging application Telegram has taken decisive action against what is believed to be several thousand channels that are connected to suspected Chinese crypto-crime proceeds. This follows recent research carried out by Elliptic that unveiled the extent of these illegal operations.
The significant crackdown comes subsequent to a report that was posted by the blockchain analytics firm. Published last Tuesday, the research indicated the staggering growth rate of the Xinbi Guarantee marketplace, which operates primarily through Telegram.
The Rising Crypto Crime Marketplaces
According to the findings of the investigation, the Xinbi Guarantee marketplace, incorporated in Colorado, has managed to process an alarming $8.4 billion worth of transactions leveraging the Tethers USDT stablecoin since 2022. Notably, these services range from money laundering, running crypto scam compounds, and other illicit services that include intimidation and even sex trafficking.
Elliptic’s report also highlighted that the firm is keeping an eye on approximately thirty other similar Telegram-based marketplaces, each exploiting stablecoin payments. These marketplaces play a pivotal role in the global cyber scam epidemic, particularly prevalent in Southeast Asia, by providing cybercriminals with the essential tools to orchestrate mass fraudulent activities.
The Impact of Major Players: Xinbi and Huione
One of the most prominent marketplaces perpetrating such activities is the Huione Guarantee. The organization behind it, the Huione Group, has relevant ties to the ruling family of Cambodia. Elliptic’s research suggests that both the Xinbi and Huione marketplaces, known as the two major platforms operating primarily through Telegram, are accountable for a combined total of $35 billion in unlawful transactions.
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) took concrete action earlier this year on the 1st of May, designating the Huione Group as a significant concern for money laundering. It is believed this group aided in laundering a minimum of $4 billion worth of illicit proceeds spanning from August 2021 till January 2025.
Scam Compounds and Money Laundering Services
The services offered on notorious marketplaces like Xinbi and Huione are known to enable the development of industrial-scale scam compounds all over Southeast Asia. These complexes are designed to entice people with well-paid IT job offers, only to traffic and imprison them, leaving them no option but to partake in immense online scams to pay off fabricated debts.
Such deceitful practices often involve the utilization of Starlink satellite internet equipment offered by Xinbi vendors, forged IDs, and databases filled with stolen personal information to target potential fraud victims. Furthermore, money laundering services make up a significant part of the business generated by these illicit platforms.
Although these services are predominantly harnessed to launder the proceeds from scams, they are also utilized for other illegal activities. For instance, funds stemming from North Korean crypto heists have also been found tangled in these money laundering proceedings.
The Infiltration of Xinbi into the US
However, what increases the severity of the Xinbi marketplace is its stated association with the United States. As per the information available on its website, the Xinbi Guarantee claims to operate as an investment and capital guarantee group company located in Colorado. Even though its primary audience consists of fraudsters based in Asia, the company has incorporated in the United States, thus adding an element of credibility in the eyes of potential targets.
Regardless, it is significant to note that such platforms are notorious for conducting exit scams, wherein they continue to accept payment without fulfilling orders until they eventually disappear with all the money. However, they inspire confidence in their customers, ensuring increased customer engagement even when the company has nefarious intentions.
The Xinbi Co., Ltd entity registered in the Colorado corporate register in August 2022 was updated to be marked as delinquent early 2025 for the lack of a periodic report. Still, the Xinbi saga remains a glaring reminder of the evolving dynamics of the crypto-crime landscape and the challenges it poses to regulatory authorities.
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