Key Takeaways
- In August, the Indian Enforcement Directorate arrested four people in relation to the fraudulent Fiewin gaming app.
- Fiewin allegedly embezzled users out of $47 million.
- In a recent announcement, Binance revealed that it helped India track the fraudsters’ crypto payments.
Binance has reported that its Financial Intelligence Unit collaborated with the Enforcement Directorate (ED) of India to uncover digital wallets involved in a $47 million fraud operation centered on the Fiewin gaming app.
The revelation comes after the ED arrested four individuals linked to the scam in August.
Fiewin Scam Explained
Fiewin was a play-to-earn app that let users deposit rupees to play minigames and win a prize. However, according to the ED, many users found they were unable to withdraw their deposits.
Local media reports indicate that the scam was run by Chinese nationals who relied on Indian conspirators to collect user payments. The stolen funds were then converted to USDT and transferred to wallets controlled by the operation’s masterminds.
In a post on Binance’s security blog on Tuesday, Sept. 25, the firm described “a complex web of transactions” spanning crypto and fiat payment rails that the fraudsters used “to hinder detection and tracing.”
The exchange said it played a “crucial role” in assisting the ED with technical insights and analysis.
Binance India: A Troubled History
Binance’s participation in the Fiewin scam bust (and its attempt to highlight the role) must be viewed in light of a historically troubled relationship with Indian authorities.
In February 2023, the Indian Financial Intelligence Unit (FIU) blocked access to the crypto exchange for failing to register under the country’s anti-money laundering (AML) regime.
Seven months later, Binance received the green light to relaunch in the country after paying a 188.2 million rupee ($2.25 million) penalty for its previous compliance failures.
However, the financial regulator isn’t the only one scrutinizing the firm’s activity. In August, Indian tax authorities accused Binance of dodging $86 million in taxes.
Turning Over a New Leaf
Binance’s efforts to present itself as a valuable collaborator for the ED reflect a global push to overhaul the company’s brand image after a string of controversies that occurred under its previous leadership.
In Tuesday’s blog post, Binance, emphasizes “collaborative investigative efforts” and a rhetorical focus on regulatory compliance that has come to characterize the company in the post-CZ era.
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
