Fiewin Betting App Under Investigation
In a significant enforcement action, the Enforcement Directorate (ED) has focused its efforts on the Fiewin app, a betting platform allegedly operated by Chinese nationals with the assistance of Indian accomplices. The ED has arrested four Indian nationals and seized assets, including cryptocurrency holdings with Binance, as part of its probe into illegal online applications.
How Fiewin Operated
Fiewin was marketed as a quick way to earn money, primarily through platforms like YouTube and Facebook. The app featured simple games such as Minesweeper and Colour Prediction, which were based purely on luck. Players were enticed to bet small amounts and, after initial wins, encouraged to bet more. However, once significant amounts were involved, withdrawals were blocked, likening this method to a 'pig butchering' scam, where victims are manipulated over time before being defrauded.
Unveiling the Money Trail
Funds from Fiewin users were deposited into accounts of 'recharge persons' in India, such as Arun Sahu and Alok Sahu. These funds were converted into cryptocurrency and transferred to wallets on Binance, controlled by Chinese nationals. This operation was facilitated by individuals like Chetan Prakash and Joseph Stalin, who managed the conversion and local company setup for payouts.
Cryptocurrency Laundering
The ED discovered that approximately Rs 400 crore was funneled through seven Binance wallets linked to Chinese nationals, with IP addresses indicating operations from China. The ill-gotten gains were layered through multiple accounts to purchase properties in India, with substantial amounts siphoned off using cryptocurrencies. USDT, a type of stablecoin, was used frequently in these transactions.
The Pig Butchering Scam
This scam technique involves 'fattening up' victims by initially allowing some winnings, only to cut off access when stakes are higher. The method utilized platforms like Telegram to engage players and manage transactions. Recharge persons would convert funds into USDT and transfer these to designated crypto wallets, often ending with Chinese nationals.
Involvement of Binance and Telegram
The investigation also exposed links between Fiewin's operations and platforms like Binance and Telegram. Players were directed to join Telegram groups for updates and instructions on transactions. Recharge persons received commissions for converting players' funds into cryptocurrency, which were then sent to wallets indicated by group instructions.
Current Status and Further Actions
As part of the ongoing investigation, the ED has sought details from Binance, which is cooperating with the probe. A provisional attachment order has been issued against assets worth Rs 25.78 crore, including Rs 24.9 crore in cryptocurrency linked to Chinese nationals. The ED continues to trace the complex financial web involving numerous digital wallets and the role of various exchanges in facilitating money laundering.
