DOJ Restrains $52.8M in Crypto Tied to Chinese Scam Marketplace Xinbi

The U.S. Department of Justice has restrained roughly $52.8 million in cryptocurrency linked to Xinbi Guarantee, a Chinese-language illicit marketplace that allegedly provided infrastructure, money laundering and other services to scam operations.

The action came alongside the seizure of Xinbi’s Telegram infrastructure and new U.S. Treasury sanctions. Blockchain intelligence firm Elliptic said its multi-year tracking of Xinbi’s wallets helped the U.S. Secret Service identify and freeze the funds.

The crackdown also highlights a growing weakness for illicit crypto marketplaces: while stablecoins can move quickly across borders, blockchain transactions leave a permanent trail that investigators can follow.

Xinbi Guarantee Processed $24 Billion Since 2022

Xinbi Guarantee operates primarily through Telegram and functions as a marketplace for scam operators. According to the DOJ, vendors advertised services including custom scam investment websites, money laundering and recruitment for scam compounds in Southeast Asia.

Elliptic estimates that Xinbi Guarantee and its merchants have processed at least $24 billion in transactions since 2022, making it the second-largest illicit online marketplace tracked by the firm.

Only Huione Guarantee was larger, processing roughly $31 billion before shutting down in 2025. A related payments service, Xinbi Pay, processed another $6 billion. Most of the activity historically involved Tether's USDT on the TRON blockchain.

The scale places Xinbi at the center of the infrastructure supporting industrialized online scams, including so-called pig-butchering and other fraud schemes.

DOJ Targets Xinbi Wallets and Telegram Channels

The DOJ said the Scam Center Strike Force seized two cryptocurrency wallets used by Xinbi to collect vendor payments. Those wallets contained approximately $12 million.

Authorities also sought to restrain 47 additional wallets believed to be connected to Xinbi's money-laundering network and vendors serving scam operations. Together, the coordinated actions restrained more than $52 million in cryptocurrency.

Elliptic provided the Secret Service with intelligence tracking Xinbi's wallet infrastructure and transaction flows. The firm said 52 wallets containing $52.8 million in USDT were frozen beginning September 8.

The action demonstrates how blockchain analytics can connect wallet activity with off-chain criminal infrastructure, allowing investigators to target financial networks rather than individual transactions.

US Treasury Sanctions Xinbi

The DOJ action was accompanied by sanctions from the Treasury Department's Office of Foreign Assets Control (OFAC).

OFAC designated Xinbi Guarantee as a significant transnational criminal organization and also sanctioned two entities that supported the marketplace's operations. The Treasury said Xinbi was used to facilitate cyber scams, fraud, money laundering and other criminal activity targeting Americans.

The United Kingdom had already sanctioned Xinbi in March 2026, adding international pressure on the marketplace.

The latest U.S. action therefore represents more than a wallet freeze. Authorities are targeting the financial infrastructure, communication channels and service providers that allow scam networks to operate at scale.

Xinbi Moves $2.8M From USDT to USDD

The crackdown also triggered an immediate response from Xinbi.

After the USDT freezes, the marketplace reportedly moved roughly $2.8 million of remaining USDT into USDD, a dollar-pegged stablecoin, through a decentralized exchange.

The attraction is straightforward. USDT can be frozen by its issuer, Tether, while USDD does not have the same centralized issuer freeze function.

However, switching to USDD does not eliminate the risk entirely. Elliptic noted that USDD is partly collateralized with USDT, meaning its ecosystem still has exposure to assets that can be frozen.

The move therefore appears more like an attempt to reduce immediate counterparty control than a complete escape from enforcement risk.

Madagascar Crackdown Adds Pressure on Scam Networks

The DOJ's announcement extended beyond Xinbi's digital infrastructure.

The Scam Center Strike Force also deployed personnel to Madagascar, where local authorities dismantled 13 Chinese-run scam compounds and arrested nearly 400 people. Strike Force personnel spent two weeks assisting with the operation and processing more than 3,200 devices.

The simultaneous actions show the increasingly coordinated approach being taken against crypto-enabled scam networks, combining blockchain tracing, asset seizures, sanctions and physical law-enforcement operations.

Why the Xinbi Freeze Matters for Crypto

The Xinbi case highlights the complicated role of stablecoins in illicit finance.

USDT has become a major settlement asset for legitimate crypto markets because it offers dollar exposure and fast transfers across blockchains. The same characteristics can make it attractive to criminal networks operating across borders.

At the same time, the ability to freeze specific USDT wallets gives law enforcement and issuers an important intervention mechanism.

Related: Tether Sued Over $42.4M USDT Freeze Before Warrant

The Xinbi case presents the other side of that equation: in this instance, the ability to freeze USDT helped authorities disrupt a large alleged criminal network.

The development also fits into the broader security trend covered in 3.63B Lost to Crypto Hacks Since 2025 as Security Risks Evolve. That report showed how quickly crypto-related losses can accumulate as attackers and organized criminal groups adapt their methods.

Xinbi Faces a Major Trust Problem

For Xinbi and similar guarantee marketplaces, the biggest impact may not be the $52.8 million freeze itself.

These platforms depend on users trusting their escrow and deposit systems. Merchants and buyers participate because the marketplace provides a degree of financial assurance in an environment where traditional legal enforcement is unavailable.

The freeze changes that calculation.

If merchants believe their wallets can be identified and frozen, they may become less willing to keep large balances within the marketplace. Elliptic described this uncertainty as a severe setback for the broader Guarantee marketplace ecosystem.

The Xinbi crackdown therefore shows both sides of blockchain transparency. Criminal networks can use crypto to move funds globally, but those transactions can also give investigators the trail needed to dismantle the financial infrastructure behind them.