U.S. Freezes $52.8M in USDT Tied to Xinbi Guarantee Scam Marketplace

The U.S. Secret Service froze $52.8 million in USDT across 52 wallets connected to Xinbi Guarantee on September 8, 2026, marking one of the largest enforcement actions against a crypto-enabled scam operation. Treasury's Office of Foreign Assets Control designated Xinbi as a transnational criminal organization on September 9, the same classification applied to drug cartels.

Xinbi operates as a Chinese-language Telegram marketplace where vendors post escrow deposits to prove creditworthiness before selling tools scammers use to defraud targets worldwide, from stolen personal data to money-laundering services. According to Decrypt, blockchain analytics firm Elliptic tracked Xinbi for several years, and their intelligence directly enabled the freezing action.

Since 2022, Xinbi and its merchants have processed at least $24 billion in transactions, making it the second-largest illicit online marketplace ever tracked, per Elliptic's analysis. Only Huione Guarantee moved more, processing $31 billion before Telegram shut it down in May 2025 following years of public exposure by Elliptic. Much of Xinbi's volume originates from "pig butchering" scams, where a stranger builds false online relationships over weeks or months before convincing victims to pour savings into bogus investment apps.

Two of the frozen wallets, containing roughly $12 million, were seized outright under a warrant unsealed by the Department of Justice. Treasury also sanctioned two firms supporting Xinbi's operations: Singapore-based SafeW Technology and Cambodia-based Anwen Technology. The UK had already sanctioned Xinbi in March.

On-chain data, per Decrypt, shows that Xinbi's business address activated on September 8 had 1.8 million USDT escape with only 37,839 USDT frozen, indicating rapid movement in the hours before full wallet constraints took effect. Xinbi swapped approximately $2.8 million of its remaining USDT into USDD, a stablecoin launched by Tron founder Justin Sun that has no central issuer able to freeze wallets, through a decentralized exchange. However, USDD markets itself as decentralized while partly backing its reserves with USDT itself, embedding the very asset with freeze capability into its alternative.

Xinbi posted a statement condemning the "arbitrary freezing" of its funds and promised to compensate customers. The DOJ's Scam Center Strike Force, launched in November 2025, has seized roughly $938 million in scam-linked cryptocurrency since beginning operations, according to Decrypt. The Strike Force also deployed agents to Madagascar to help local authorities take down 13 Chinese-run scam compounds and process evidence from nearly 400 arrestees, including more than 3,200 seized devices.