India’s financial regulator, the Enforcement Directorate (ED), recently cracked down on the Fiewin gaming scam, which had lost $47.6 million (approximately Rs. 400 crore) from its users. In a recent update on the case, Binance announced that its internal intelligence unit played a key role in assisting the Enforcement Directorate (ED) in uncovering the Fiewin gaming scam. In a statement released on Wednesday, September 25, Binance emphasized that public-private collaboration to combat financial crime can enhance its contribution to India’s growing cryptocurrency landscape.
Details of the Feewin case
The Enforcement Directorate (ED) flagged the Fiewin gaming platform as a potential fraud after detecting suspicious transactions related to it. During the course of the investigation, the Education Bureau gathered evidence that Fiewin pretended to be a legitimate application offering online betting and gaming while allegedly defrauding users.
Fiewin attracts users by promising quick rewards through mini-games and encourages them to top up their in-app balance through various methods. However, once users accumulate large balances, the platform denies them the ability to withdraw funds.
In August, the education ministry arrested four individuals associated with Fiewin for allegedly stealing more than $47.6 million (approximately Rs. 4 billion) from its users. The stolen funds were laundered through cryptocurrency assets and digital wallets.
Binance noted in a statement on Wednesday that “the money was transferred to various cryptocurrency addresses and ultimately traced back to the operation. Throughout ED’s investigation, Binance’s Financial Intelligence Unit (FIU) provided information on tracing the funds to critical intelligence” and expose fraud networks. ”
Cooperation between Binance and ED
Binance claims to have provided technical insights and analysis to the Ministry of Education to assist authorities in launching a comprehensive investigation into Fiewin’s operations. According to its statement, the exchange also helped ED track money laundering flows in various cryptocurrency wallets.
Binance investigative expert Ferdinando D. worked on the case with the ED.
“Through its investigation, the Department discovered that the app was part of a cross-border criminal network that used various methods to obfuscate the origin and movement of illicit funds by leveraging ‘mules’ and bank accounts of cryptocurrency wallets, creating a complex network transactions to hinder detection and tracing,” Binance said.
Binance recently obtained Financial Intelligence Unit (FIU) registration in India and pledged to cooperate with local law enforcement agencies to investigate situations where the crypto industry is being exploited by bad actors to defraud innocent individuals.
“Public-private collaboration is critical to tackling complex financial crimes. Binance’s professional investigation team is an example of how private companies can work closely with law enforcement. In this case, they provided analytical support to the investigation,” Binance quoted an ED spokesperson words.
Cryptocurrency scams continue to spread around the world. According to a recent FBI report, cryptocurrency-related fraud increased by 45% in 2023, resulting in losses of over $5.6 billion (approximately Rs. 46,825 crore).
Back in August, Binance claimed to have avoided losses worth $2.4 billion (approximately Rs. 20,068 crore) in the first half of 2024, with 45% of the funds related to fraud and scams.
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