Cyber Crime
Rs 400 Crore Fiewin Scam: Shocking Details of How Indian Gamers Were Duped
The ED arrests four in the Rs 400 crore Fiewin scam. Users were duped via a gaming app, with laundered money traced through cryptocurrency wallets linked to Chinese nationals.
The Enforcement Directorate (ED) has made a huge progress in its investigation into the Fiewin online gaming app, a platform that has allegedly defrauded users of over Rs 400 crore (approximately $47.6 million). The scam, which has been linked to a broader transnational money laundering network, resulted in the arrest of four individuals. The investigation also revealed the involvement of Chinese nationals and the use of cryptocurrency wallets to launder stolen funds.
How the Fiewin Scam Operated
Fiewin, at first glance, appeared to be a legitimate gaming app, offering users a chance to earn money by playing various mini-games. New users were lured in with promises of easy earnings and could quickly top up their accounts using multiple payment methods. However, once users began accumulating significant balances, they were blocked from withdrawing their funds, trapping their money within the platform.
Victims across India started reporting their losses to local police, leading to a flood of complaints. When the scale of the scam became apparent, the case was escalated to the ED, India’s key financial crime investigation agency.
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A Cross-Border Scam Unveiled
As the investigation unfolded, the ED discovered that the Fiewin app was more than just a local scam; it was part of a sophisticated international network. The operators of the app used a complex web of financial transactions to hide the movement of funds. These funds, collected from unsuspecting users, were funneled into the bank accounts of “mules” — individuals who allowed their accounts to be used for illicit transactions in exchange for commissions.
The real breakthrough came when the ED traced the money to cryptocurrency wallets, most of which were linked to the global crypto exchange, Binance. The app’s operators converted the stolen money into cryptocurrency, making it more challenging to track. However, Binance’s Financial Intelligence Unit (FIU) played a crucial role in helping the ED trace these transactions, providing key intelligence that led to the unraveling of the scam.
Arrests and Key Players Involved
Among those arrested are Arun Sahu and Alok Sahu, two individuals from Rourkela, Odisha, who acted as “recharge persons.” These individuals were responsible for receiving the stolen funds into their bank accounts, converting them into cryptocurrency, and transferring them to wallets controlled by Chinese nationals.
Chetan Prakash, an engineer based in Patna, Bihar, also played a pivotal role in the laundering operation, helping facilitate the conversion of INR (Indian Rupees) into cryptocurrency (USDT). Another key player, Joseph Stalin, a software engineer from Chennai, helped a Chinese national named Pie Pengyun set up a company, Studio 21 Pvt. Ltd., which was used to handle bulk payouts, adding legitimacy to the scam in its early stages. This, in turn, encouraged users to make larger deposits, thinking the platform was credible.
These individuals are now in ED custody and face serious charges under the Prevention of Money Laundering Act (PMLA) of 2002. Their actions, along with the involvement of Chinese nationals, point to a sophisticated network designed to defraud people on a massive scale and siphon off the funds through a series of layered transactions.
Binance’s Critical Role in the Investigation
Binance, one of the world’s largest cryptocurrency exchanges, became a key partner in this investigation. Having obtained a license to operate in India in August 2024, Binance’s FIU provided technical expertise and intelligence that proved instrumental in tracing the money trail. Its investigation team worked alongside the ED, helping map the flow of funds across multiple cryptocurrency wallets and exposing the full extent of the scam.
A representative from the ED stated, “Public-private collaborations are essential in fighting complex financial crimes. Binance’s specialized investigation team provided valuable analytical support that significantly contributed to the investigation.”
This partnership between Binance and the ED has already shown its effectiveness in previous cases. In the E-Nugget scam, another fraudulent gaming platform, Binance’s expertise helped the ED freeze 42 digital-asset accounts and hundreds of bank accounts containing nearly $6 million in illicit funds.
#Binance and The Enforcement Directorate (ED) of India cracks down on Rs 400 crore gaming app scam.
A thorough investigation into the Fiewin gaming app scam uncovered links to digital wallets and led to the arrest of four individuals.
We remain committed to working closely with… pic.twitter.com/32I2iewJl0
— Binance (@binance) September 26, 2024
The Road Ahead: Breaking Down Financial Crime Networks
The investigation into the Fiewin scam is far from over. With the ED and Binance working closely together, more arrests are likely as they continue to untangle the web of transactions that allowed the app’s operators to launder such a vast amount of money.
Binance’s presence in India as a licensed entity is expected to strengthen future collaborative investigations. Ferdinando D., a Binance investigation specialist, highlighted the importance of partnerships in fighting these emerging threats: “This case shows how critical it is for public institutions and private companies to work together in addressing digital threats. By combining our expertise, we can better protect the public from financial fraud.”
A Growing Threat: The Need for Vigilance
These scams often appear harmless at first glance but can result in devastating losses for individuals. The ongoing efforts of the ED and the critical role played by Binance in tracking and tracing funds highlight the importance of vigilance, collaboration, and advanced technology in fighting financial crimes.
As authorities continue to expose the full scale of the Fiewin scam, the case underscores the necessity of protecting users from fraudulent platforms, educating them about digital threats, and ensuring that justice is served for the victims.
In a world where financial crimes are becoming increasingly digital and borderless, partnerships like the one between the ED and Binance offer a blueprint for how law enforcement and private companies can work together to combat these threats and ensure the integrity of our financial systems.