US Seizes Xinbi Crypto Marketplace and Restrains $52 Million

The U.S. Department of Justice and Treasury Department have seized Telegram infrastructure and restrained over $52 million in cryptocurrency tied to Xinbi Guarantee, a Chinese-language marketplace accused of facilitating money laundering and scam operations for organized crime [1]. The crackdown targets a platform that processed an estimated $24 billion in digital and fiat assets since 2022, marking a significant escalation in efforts to dismantle the financial infrastructure supporting global cyber-fraud [2].

Dismantling the Illicit Escrow Network

The coordinated enforcement action, authorized by a federal judge on Sept. 7, targeted the core operational tools used by Xinbi to facilitate scams [1]. The platform functioned as an escrow service, holding payments for vendors who provided custom scam websites, money-laundering services, and recruitment for forced-labor compounds in Southeast Asia [1]. By seizing Telegram channels and two primary cryptocurrency wallets holding approximately $12 million, authorities aimed to disrupt the marketplace's ability to coordinate transactions between scammers and service providers [1].

The Treasury Department’s Office of Foreign Assets Control (OFAC) further designated Xinbi as a significant transnational criminal organization, simultaneously sanctioning Singapore-based SafeW Technology and Cambodia-based Anwen Technology for providing material support [1]. According to the DOJ, Xinbi had begun migrating its merchant and laundering operations to the encrypted SafeW application around June 2025 as law enforcement scrutiny intensified [1]. The platform also introduced a proprietary payment application, XinbiPay, in an attempt to bypass traditional financial oversight [1].

Market Impact and Competitive Shifts

The enforcement action has triggered a wave of defensive activity across the underground crypto economy. On-chain data from Bitrace shows that daily USDT withdrawals from a Xinbi-linked sub-platform jumped from a range of $389,000–$564,000 in early September to $1.81 million by Sept. 9 as merchants scrambled to move funds before further freezes [2]. This panic has spread to rival platforms, with the competitor Fulilai Guarantee removing money-laundering merchants from its public groups and recording approximately $9.3 million in outflows following the sanctions [2].

The crackdown highlights the evolving nature of crypto-enabled crime, where platforms like Xinbi serve as "Black U" hubs—connecting stolen assets from hacks with stablecoins derived from romance and investment scams [2]. By targeting the service providers and communication channels rather than just individual wallets, authorities are attempting to break the link between stolen tokens and the cash-out networks that convert them into fiat [2].

What to watch

• Platform Migration: Monitor whether Xinbi’s merchant network successfully migrates to alternative encrypted messaging apps or if the loss of centralized payment infrastructure permanently degrades its transaction volume [2].
• Rival Platform Stability: Watch for further "purges" on competing marketplaces like Fulilai, as operators attempt to avoid becoming the next target of OFAC sanctions [2].
• Stablecoin Usage: Observe if the shift away from USDT—driven by issuer-level freezes—leads to increased adoption of alternative assets like USDD within illicit marketplaces [2].

The open question remains whether the disruption of Xinbi’s infrastructure will force a lasting contraction in the underground economy or simply accelerate the fragmentation of these services into smaller, more difficult-to-track networks.