If a stranger online ever tips you off to a great cryptocurrency investment, stop right there. That is exactly how millions of dollars have been stolen from everyday Americans, including one Virginia resident who lost $800,000 in a single scheme.
Federal prosecutors just took a major step to crack down on this kind of fraud. U.S. Attorney Jeanine Pirro announced new sanctions this week against an operation called Xinbi Guarantee. She called it an illicit scamming marketplace used by Chinese cybercriminals to target Americans.
How the Scam Worked
Xinbi operated on the messaging app Telegram as a Chinese-language marketplace. Scammers could go there and buy ready-made fake investment websites, ones designed to look exactly like real brokerages. They could also purchase money laundering services to hide the money once victims sent it.
Xinbi acted as the middleman. It held the money paid by scammers until their services were complete, a built-in protection for the criminals on both sides of the transaction.
Secret Service Special Agent Tara McLeese said investigators were able to follow the money as it moved through the Xinbi network. Pirro’s Scam Center Strike Force ultimately froze $52 million in cryptocurrency sitting in digital wallets connected to Xinbi.
The Bigger Picture
The Treasury Department has now designated Xinbi a transnational criminal organization. That designation cuts the group off from the U.S. financial system. Americans are prohibited from doing business with Xinbi, and any blocked assets must be reported to the Treasury’s Office of Foreign Assets Control.
Treasury also accused Xinbi of ties to North Korean hackers and other criminal syndicates. Authorities said there was evidence the operation recruited trafficking victims to work at scam compounds, primarily in Southeast Asia.
A federal court in Washington, D.C., authorized the seizure of Xinbi’s Telegram channels on Monday. That shut down their ability to operate, at least for now. Pirro acknowledged it would be very easy for the group to set up shop on a new platform.
Separately, Pirro said her team recently traveled to Madagascar, where they helped local authorities shut down 13 scam centers allegedly run by Chinese organized crime groups. Five hundred people were arrested. Thirty Chinese leaders of those compounds were sent back to China.
To date, the U.S. government says it has frozen $938 million linked to these types of schemes. President Donald Trump has been briefed on the cryptocurrency scam operations targeting Americans, Pirro said.
The Warning You Should Share Right Now
Officials at the announcement were direct: be suspicious of any investment opportunity offered by someone you do not know on social media.
“Whether it started on a mistaken phone call or WhatsApp or any of the other social media websites. A text, a wrong number. Do not send a dollar. Do not send a penny,” Pirro said.
If someone in your life (a friend, a family member, a neighbor) mentions an investment opportunity that sounds almost too good to be true, Pirro’s advice is simple. Tell them to stop.
Old crimes are being committed in new ways. Knowing how this one works is the best protection you have.
