Telegram Shuts Down Alleged $8B Chinese Crypto Scam Operation—Based in Colorado
Messaging platform Telegram just axed a massive crypto crime marketplace—one that allegedly funneled $8 billion through Chinese operators... from a base in suburban Colorado. Talk about globalized crime with a side of Rocky Mountain irony.
The takedown hits during peak crypto enforcement season—right as regulators dust off their ’we told you so’ speeches. Meanwhile, Wall Street still can’t decide if blockchain is the future or just a really elaborate Ponzi scheme.
Cyberscam epidemic
Services offered on marketplaces like Xinbi and Huione are infamous for enabling industrial-scale scam compounds across Southeast Asia.
These compounds attract victims with the promise of well-paid IT work. When they arrive they are trafficked, imprisoned and forced to carry out online pig butchering scams to pay off phony debts.
Xinbi vendors offer Starlink satellite internet equipment, which is often used by scam compounds, fake IDs and databases of stolen personal information used to target potential fraud victims, Elliptic said.
Another big driver of business is money laundering services, according to the report. Such services are mostly used to launder the proceeds of pig butchering scams, but funds from North Korean crypto heists are also in the mix.
Elliptic found about $220,000 in USDT originating from the $230 million WazirX theft in July was sent to Xinbi, indicating that vendors operating on the marketplace were employed to help launder proceeds of the heist.
It’s not clear whether North Korean IT workers are interacting with Xinbi vendors directly, though.
“Our hypothesis is that the funds are under the control of Chinese money laundering groups by the time they enter marketplaces such as Xinbi,” Tom Robinson, chief scientist and co-founder at Elliptic, told CoinDesk over email.
Colorado connection
What sets Xinbi apart from other similar marketplaces, however, is its connection to the U.S.
On its website, Xinbi describes itself as an “investment and capital guarantee group company” operating as a Colorado-based corporation, Elliptic said.
The Colorado corporate register shows a company called “Xinbi Co., Ltd” was incorporated in August 2022, with an office in Aurora, Colorado even though the Chinese-language marketplace is primarily used by fraudsters in Asia.
“These marketplaces depend on trust,” Robinson said. “A U.S. incorporation does bring some level of legitimacy.”
Robinson also noted that similar marketplaces have previously conducted exit scams, where a business stops shipping orders while still receiving payments, eventually walking away with the money. “Anything that inspires confidence will help attract customers,” he said.
In January 2025, the company’s status was updated to delinquent for failing to file a periodic report.
