Binance, the world’s leading crypto exchange by number of users after Coinbase, says it helped India’s Enforcement Directorate (ED) crack a $47.6 million gaming app scam in which scammers used “digital wallets linked to Binance” to launder money obtained from victims.
Binance confirmed that its Financial Intelligence Unit (FIU) cooperated with the ED at all levels to assist in apprehending the perpetrators of this multi-million-dollar scam.
In a statement issued on Wednesday, Sep. 25, Binance said: “Throughout the ED’s investigation, Binance’s FIU provided critical intelligence that was instrumental in tracing the funds and uncovering the fraud network.”
What Is the Fiewin Scam?
Fiewin is a gaming app where users in India could participate in various gaming activities and make in-app purchases by topping up their wallets. Users were enticed with different rewards whenever they made in-app purchases or every time they added money to their wallets.
The app’s marketing also encouraged users to deposit more money into their in-game wallets to increase their chances of making a profit.
A typical answer on digital platforms to lure users into getting more deposits on the Fiewin app.
Source: Quora
However, Fiewin users who had deposited funds into their in-game wallets were later unable to withdraw them. Soon, local police in various Indian cities received multiple complaints about the app, leading to an ED investigation.
How Did Binance Help the ED?
Although multiple arrests have been made by the ED in connection with the Fiewin scam, the victims have yet to recover the amounts they lost.
Binance shared crucial information with the ED that helped trace the movement of funds. The scammers used a complex network of international fund transfers, involving cryptocurrency.
Reportedly, digital wallets linked to Binance were also used. While specific details of the information Binance shared with authorities remain unclear, the crypto exchange stated that it provided “analytical” data.
India is leading in crypto adoption. As a result, the number of scams and the use of crypto for money laundering are also on the rise. Recently, Binance distanced itself from the WazirX exchange hack, where users lost close to $230 million. In a statement, the crypto exchange blamed WazirX CEO Nischal Shetty for misleading users.
