Indian law enforcement had an assist from Binance in the investigation of four individuals linked to the Fiewin gaming app. Officials have since arrested the suspects and accused them of defrauding victims of about $47.6 million and laundering it using cryptocurrency.
The Fiewin app, marketed as an online betting and gaming platform, promised users easy earnings but ultimately trapped their funds, leaving them unable to withdraw their money.
The Enforcement Directorate (ED) of India's investigation uncovered what it calls a sophisticated financial fraud. According to the ED, the app lured users into betting and gaming activities before freezing their accounts once significant funds had accumulated. These funds were then transferred through various cryptocurrency wallets, making it challenging to trace the transactions.
The Enforcement Directorate office did not immediately respond to a request for comment from Decrypt.
In this operation, the ED received support from Binance’s Financial Intelligence Unit (FIU), which provided technical expertise that helped the ED trace the movement of funds through blockchain analysis.
“Public-private collaborations are crucial in tackling complex financial crimes. Binance’s specialized investigation team is a great example of how private-sector firms can work closely with law enforcement,” said an ED spokesperson in a Binance press release.
The Fiewin app scam is not the first such case to be exposed by the ED.
The agency previously worked with Binance to dismantle the E-Nugget scam, a fraudulent digital investment scheme. These collaborative efforts have led to the freezing of millions of dollars in illicit assets and highlighted the critical role that partnerships between law enforcement and the private sector play in combating financial crime.
The crypto space has seen a surge in scams and hacks over the last year, with several high-profile incidents.
The recent WazirX hack resulted in the loss of over $235 million, with North Korean actors suspected to be behind the attack. Earlier, the Atomic Wallet attack led to the loss of over $35 million from users' wallets, showcasing vulnerabilities even in established platforms.
Similarly, "pig butchering" romance scams have increased 85 times over since 2020, manipulating victims into fake crypto investments. Moreover, a report from Immunefi noted a 192% year-over-year increase in crypto hacks and scams in 2023, although stolen amounts have decreased due to better detection.
Edited by Stacy Elliott.