A $20 Billion Crypto Scam Market Faces a New Government Crackdown

Chinese-language online black markets have become one of the biggest drivers of cybercrime in history, processing tens of billions of dollars of illicit finance every year. Helping the trade in stolen data, money-laundering services, and even at times electrified shackles, these underground marketplaces have fueled scam operations and human trafficking around the world. Now, officials in the United Kingdom have dealt one $20 billion cryptocurrency marketplace a potentially punishing blow.

On Thursday, the UK’s Foreign, Commonwealth and Development Office, also known as the Foreign Office, revealed financial sanctions against the Xinbi Guarantee online marketplace, which will likely limit its operations. The online bazaar, which has operated using channels and accounts on the messaging platform Telegram, has previously been linked to billions in cryptocurrency transactions and proved hard to disrupt.

The sanctions against Xinbi were issued as British officials also penalized multiple individuals allegedly linked to the operation of industrial-sized scam compounds in Cambodia, including the 20,000 person #8 Park compound. The British government also seized properties in London, including a £9 million penthouse, linked to the sanctioned individuals. Foreign Office minister Stephen Doughty said in a statement that the sanctions “send ​a clear message” that those running scam compounds will face consequences. The action follows a sweeping wave of penalties from the US and UK against Cambodian-linked scamming operations in October.

Over the last decade, hundreds of thousands of victims of human-trafficking have been forced to work out of compounds across Cambodia and Southeast Asia, running online cryptocurrency investment and romance scams day and night. This multibillion-dollar scam industry, which often has links to Chinese organized crime groups, has flourished and been propped up by secondary services and cryptocurrency marketplaces that sell the tools and technical infrastructure needed to operate the scams. These include Xinbi, which has become one of the largest marketplaces, since the Huione Group was sanctioned last year.

“Xinbi is or has been involved in profiting financially or otherwise obtaining a benefit from human rights abuses,” the UK’s sanctions register alleges, referring to brutal treatment and torture that has happened in some scam compounds in the region. “Xinbi has enabled and profited from the operation of scam centers in Southeast Asia.”

“Sanctions will make it more challenging for Xinbi, its merchants and users, to spend or exchange cryptocurrency that has passed through the marketplace,” Tom Robinson, the chief scientist and cofounder of crypto-tracing firm Elliptic, tells WIRED. Last year, analysis from Elliptic revealed that the Xinbi Guarantee platform has facilitated at least $8.4 billion in transactions since 2022. The “vast majority” of that money, Robinson said at the time, was likely to be money stolen from online scam victims. However, the platform’s other activity also involved selling the technology, personal data, and money-laundering services needed to run online scams.

Following WIRED’s reporting last May, Telegram removed channels and accounts linked to both the Huione marketplace and Xinbi. Since then, though, Xinbi has rebuilt its presence on Telegram and also moved to diversify its infrastructure to be more resilient to takedown actions.

“Xinbi was able to recover very effectively from Telegram’s action against it. It simply created new Telegram channels and continued its activity,” Robinson tells WIRED. “In fact it has grown substantially, increasing its market share following the shutdown of Huione Guarantee and other similar marketplaces.” Robinson now estimates that across the entirety of Xinbi, including the merchants that operate on it and its own infrastructure, it has processed at $19.7 billion.