The Enforcement Directorate (ED) has uncovered a massive ₹400-crore fraud linked to the online gaming app, Fiewin, involving Chinese nationals. The ED has taken swift action by freezing accounts of some individuals linked to the scam and arresting four Indians who played a role in supporting the foreign perpetrators.
How the Fiewin Fraud Operated
Fiewin, an online gaming app that initially attracted users with promises of easy money through mini-games, deceived users by restricting withdrawals after their accounts accumulated substantial amounts. According to a statement from Binance, the cryptocurrency exchange that assisted in the probe, users were encouraged to top up their in-app balance but soon found themselves unable to withdraw their earnings, thus losing their investments.
The scam saw approximately ₹400 crore being stolen, which was then transferred to various cryptocurrency addresses, ultimately leading to Chinese nationals controlling the operation.
The Role of Recharge Persons
The ED’s investigation revealed that funds from Fiewin’s games were funneled into accounts controlled by “recharge persons” based in India. These individuals, in exchange for a commission, allowed their accounts to be used for money laundering. The stolen money was converted into cryptocurrency and transferred to crypto wallets managed by Chinese nationals.
Binance explained in its statement that the scam was part of a broader cross-border criminal network. The fraudsters used techniques to hide the movement of funds, such as using bank accounts of mules and cryptocurrency wallets, making it difficult to trace the origin of the illicit funds.
Arrests and Accused Involved
The investigation has led to the arrest of several key individuals involved in facilitating the fraud. Among them are Arun Sahu and Alok Sahu from Rourkela, Odisha, who acted as recharge persons. Money collected from online gamers was deposited in their accounts and later converted into cryptocurrency.
Chetan Prakash, an engineer from Patna, was also arrested for his involvement in converting the funds into cryptocurrency. Another accused, Joseph Stalin, a software engineer from Chennai, allegedly helped a Chinese national, Pie Pengyun, by making him a co-director in his company, Studio 21, which was used to facilitate payouts related to the gaming app. This association initially gained the confidence of gamers, prompting them to place larger bets.
Investigative Support from Binance
Binance, which runs the world’s largest cryptocurrency exchange, has been instrumental in assisting the ED with its probe. The exchange revealed that the fraud was conducted using privacy-focused messaging apps like Telegram, making communication between the Indian accused and the Chinese nationals difficult to trace. However, through a thorough investigation, the authorities traced nearly ₹400 crore laundered through eight Binance wallets belonging to Chinese nationals.
Ongoing Investigation
As the investigation continues, the ED and Binance are working together to further unravel the complex web of transactions and individuals involved in the Fiewin fraud. Their combined efforts aim to expose the full extent of the criminal network behind the scheme and hold all responsible parties accountable.
The case has raised serious concerns over the misuse of online gaming platforms for money laundering, and it underscores the need for stricter regulations and monitoring in the sector.