Mumbai: The Enforcement Directorate (ED), in collaboration with global cryptocurrency exchange Binance, has uncovered a massive Rs 400 crore online gaming scam linked to Chinese nationals. This crackdown has resulted in the arrest of four Indian nationals allegedly involved in laundering money through the Fiewin gaming app. The ED has also attached assets, including cryptocurrency holdings, associated with the scam.
The ED investigation revealed that Chinese nationals allegedly operated the illegal betting and gaming application, Fiewin, with assistance from their Indian accomplices. The arrested individuals—Arun Sahu, Alok Sahu, Chetan Prakash, and Joseph Stalin—are currently in judicial custody.
According to a statement released by Binance on Wednesday, the company’s internal intelligence unit played a crucial role in assisting the ED in exposing the Fiewin scam. The gaming platform siphoned off approximately $47.6 million (around Rs 400 crore) from its users, promising quick returns through mini-games but blocking withdrawals once user accounts accumulated substantial funds. Fiewin was marketed as an app for making fast and easy money, promoted through YouTube, Facebook, and other digital platforms. The app featured simplistic games like Minesweeper and color prediction, relying entirely on luck without requiring any skill from players.
Funds from app users were funneled into the bank accounts of Indian “recharge persons” like Arun and Alok Sahu, who are accused of converting funds received from Fiewin users into cryptocurrency and transferring them to wallets owned by Chinese nationals on Binance. Chetan Prakash assisted with this conversion, while Joseph Stalin facilitated the involvement of Chinese national Pie Pengyun in a local company used for payout services.
The ED probe has revealed that around Rs 400 crore was generated from this scheme and moved to seven Binance wallets linked to Chinese nationals, as evidenced by access log IP addresses indicating operations from China.
Betting App Fiewin Under ED Scanner; Cryptocurrency in Binance Attached, Chinese Nationals Identified in Crypto Laundering Scheme | File Photo
The ED has identified Chinese nationals Huang Liangliang, Zhang Longlong, and Zheng Wenjun as the alleged beneficiaries who received funds in their Binance wallets after extensive layering through multiple crypto exchanges. A provisional attachment order has been issued for properties worth Rs 25.78 crores, including cryptocurrency worth Rs 24.9 crores belonging to these nationals.
The investigation further disclosed that the gains from the Fiewin app were layered and laundered through multiple accounts to acquire movable and immovable properties. A significant portion of the proceeds was routed through cryptocurrency, utilizing various private and exchange-based wallets.
In its statement, Binance indicated that the money was transferred to various cryptocurrency addresses, which were ultimately traced back to the operation. Throughout the ED's investigation, Binance's Financial Intelligence Unit (FIU) provided crucial intelligence that helped trace the funds and expose the fraud network. The exchange claims to have provided technical insights and analysis to assist authorities in launching a comprehensive investigation into Fiewin's operations.
Officials noted that the scam followed a modus operandi similar to "pig butchering" scams, where victims are encouraged to invest small amounts in seemingly easy and profitable games. Initially, small winnings are allowed to be withdrawn to build trust, but when stakes are high, users find themselves unable to withdraw their funds, and the perpetrators disappear with the money.
Despite the government's ban on Fiewin, the network continued to thrive by exploiting loopholes. Players were directed to join Telegram groups, where they received updates and were encouraged to bet larger amounts. The money transferred by players was credited to the accounts of recharge persons, who earned a commission for their roles. Once amounts crossed a certain threshold, recharge persons were instructed to buy USDT from designated sellers and transfer the amounts to their crypto wallets, usually on Binance. They then sent the USDT to specified wallets as instructed in the group. These payout handlers converted the cryptocurrency into cash through various exchanges, handing it over to the Chinese nationals involved in the scam.
The investigation has highlighted the sophisticated methods used by the fraudsters, involving multiple layers of transactions to avoid detection. The network utilized bulk payment platforms like Cashfree and Paytm for payouts, complicating the tracing of funds. The ED continues to probe the case, aiming to dismantle this intricate network.
