The Enforcement Directorate (ED) uncovered a ₹400 crore fraud linked to the online gaming app, Fiewin, which reportedly involved Chinese nationals. The app allegedly attracted users by offering them a chance to easily earn money through mini-games.
According to an NDTV report, four Indians accused of aiding the Chinese nationals in this scheme were arrested by ED officials in Kolkata. Binance, the world’s largest cryptocurrency exchange, supported the investigation. Additionally, approximately ₹25 crore has been frozen as part of the probe.
How was the fraud uncovered?
The Fiewin app attracted users by offering an easy way to earn money through mini-games, as noted in a Binance statement cited by NDTV.
“New users could quickly create an account and begin participating in the app’s activities, with the option to ‘top up’ their in-app balance via various payment methods. However, reports have surfaced suggesting that once users’ accounts accumulated substantial funds, the app stopped allowing them to withdraw the funds, leaving them unable to recover their money,” the statement said.
The ED’s investigation uncovered that approximately ₹400 crore was misappropriated through this scheme. “This money was transferred into various cryptocurrency addresses, which were later traced back to the operation,” Binance reported.
As more individuals fell victim to the online gaming app, local police began receiving an increasing number of complaints. Due to the rising complaints, the case was handed over to the ED.
The ED’s inquiry revealed that Chinese nationals, working in collaboration with certain individuals in India, were behind this fraudulent operation.
Who are ‘recharge persons’ involved in the fraud?
The investigation revealed that the funds collected from gaming were deposited into the accounts of individuals referred to as “recharge persons.” These individuals permitted their accounts to be used in exchange for a commission from the app owners. According to the ED, the total amount was subsequently converted to cryptocurrency and transferred to the crypto accounts of Chinese nationals.
“Through its investigation, the ED discovered that the app had been part of a cross-border criminal network that used various methods to obfuscate the origin and movement of illicit funds by utilizing bank accounts of ‘mules’ and cryptocurrency wallets, creating a complex web of transactions to hinder detection and tracing,” Binance said.
Who has all been arrested so far?
– The ED investigation revealed that Arun Sahu and Alok Sahu, from Rourkela, Odisha, acted as “recharge persons,” collecting money from online gamers and depositing it into their accounts. This money was then converted to cryptocurrency and transferred to online wallets belonging to Chinese nationals.
– Chetan Prakash, an engineer from Patna, was arrested for his role in converting funds from the recharge persons’ accounts into cryptocurrency.
– Joseph Stalin, a software engineer from Chennai, was also arrested. He allegedly assisted Pie Pengyun, a Chinese national from Gansu province, in becoming a co-director of his company.
– The ED found that Pengyun utilised Stalin’s company, Studio 21, for bulk payouts related to the Fiewin app, which initially built trust with online gamers, encouraging them to place larger bets.
– The investigation has led to multiple arrests of individuals facilitating the fraud, who communicated using privacy-focused messaging apps and operated from various locations.
– So far, approximately ₹400 crore has been laundered through the Fiewin app, deposited as cryptocurrency into eight Binance wallets owned by Chinese nationals. These Chinese nationals communicated with the Indian accused via the Telegram platform.
