Binance Claims ED Helped Crack Fiewin Gaming Scam: Full Details
India’s financial watchdog, the Enforcement Directorate (ED), recently cracked down on the Fiewin gaming scam that siphoned off $47.6 million (roughly Rs. 400 crore) from its users. In a recent update on the matter, Binance announced that its internal intelligence agency played a significant role in helping the Enforcement Directorate (ED) uncover the Fiewin gaming scam. In a statement released on Wednesday, September 25, Binance emphasized that public-private partnerships in the fight against financial crime can amplify its contributions to India’s changing crypto landscape.
The details of the Fiewin case
The Enforcement Directorate (ED) flagged the Fiewin gaming platform as a potential fraud after detecting suspicious transactions associated with it. During their investigation, the ED gathered evidence suggesting that Fiewin was posing as a legitimate app offering online betting and gaming while allegedly defrauding its users.
Fiewin attracted users by promising quick returns through mini-games and encouraged them to top up their in-app balances through various methods. However, once users had accumulated significant balances, the platform denied them the ability to withdraw their funds.
In August, the ED arrested four individuals associated with Fiewin for allegedly stealing over $47.6 million (approximately ₹400 crore) from its users. The stolen money was laundered through cryptocurrencies and digital wallets.
In its statement on Wednesday, Binance noted: “These funds were transferred to various cryptocurrency addresses, which were eventually traced back to the operation. During the ED’s investigation, Binance’s Financial Intelligence Unit (FIU) provided crucial information that was instrumental in tracing the funds and exposing the fraud network.”
Binance’s Involvement in ED
Binance claims that it provided technical insights and analysis to the ED to help authorities launch a comprehensive investigation into Fiewin’s activities. According to the statement, the exchange also helped the ED trace the flow of laundered money through various cryptocurrency wallets.
Ferdinando D., a research specialist at Binance, worked with the director on this case.
“Through the investigation, the ED discovered that the app was part of a cross-border criminal network that used various methods to obscure the origin and movement of illicit funds by leveraging bank accounts of ‘mules’ and cryptocurrency wallets, creating a complex web of transactions to hinder detection and tracing,” Binance said.
Binance, which recently obtained registration as a Financial Intelligence Unit (FIU) in India, has pledged to work with local law enforcement agencies to investigate instances where the crypto sector is being exploited by malicious actors to defraud innocent individuals.
“Public-private partnerships are crucial in tackling complex financial crimes. Binance’s dedicated investigative team is an example of how private sector companies can work closely with law enforcement. In this case, they contributed to the investigation with analytical support,” Binance quoted an ED spokesperson as saying.
Crypto fraud is on the rise globally. According to a recent FBI report, crypto fraud is set to increase by 45 percent in 2023, resulting in losses of over $5.6 billion (approximately Rs. 46,825 crore).
Binance claimed in August that it had prevented losses worth $2.4 billion (approximately Rs 20,068 crore) in the first half of 2024, 45 percent of which were related to fraud and scams.
