US Department of Justice Freezes Over $52 Million in Xinbi Assets, Tether Assists Investigation
The US Department of Justice's Fraud Center Strike Force, in coordination with the Treasury Department, has taken coordinated law enforcement action against the illegal market Xinbi Guarantee, freezing and restricting the disposal of over $52 million in cryptocurrency assets in a single day. Since the establishment of the task force, approximately $938 million has been restricted in total. Tether is assisting with the investigation.
The Department of Justice stated that Xinbi primarily operates through instant messaging channels, providing customized investment scam websites and money laundering services to scam groups, and recruiting victims of human trafficking into Southeast Asian scam parks. Law enforcement has seized its channels and two cryptocurrency wallets totaling approximately $12 million, and restricted around 47 related wallets. The Secret Service and analysis firm Elliptic have identified a frozen amount of about $52.8 million, mostly in USDT, involving around 52 addresses. The Treasury Department's Office of Foreign Assets Control has designated Xinbi as a significant transnational criminal organization and sanctioned two supporting entities. The task force assisted Madagascar in shutting down 13 scam parks, processing over 3,200 devices, and nearly 400 arrests were made locally.
Xinbi has been identified by analysis firms as a large illegal trading venue following the previous generation of guarantee markets, with cumulative transactions amounting to tens of billions of dollars. The UK had already imposed sanctions on it earlier this year. After the channels were deleted, the platform condemned the freezing and stated it would compensate customers while shifting to other stablecoins. The strike force was launched in November 2025 and announced plans to expand the crackdown on scam parks globally.
Mechanically, this is the interaction between the issuer's freezing rights and on-chain analysis: stablecoins can disable addresses at the contract level, and law enforcement can turn liquid assets into non-transferable balances on the spot. The beneficiaries are the dollar stablecoin issuers and analysis firms that cooperate with the freezing; the pressured parties are the funding chains of scam parks relying on guarantee market settlements and the affected over-the-counter intermediary addresses. Funds do not return to victims' accounts but first enter restriction and confiscation procedures.
$938 million is the cumulative restricted amount by the task force, not the total flow of the Xinbi single market. Shifting to stablecoins without freezing switches will move the next round of line tracing from address lists to reserves and issuing entities.
Source: Public Information
ABAB AI Insight
The guarantee market has been reborn under a new name after the previous generation was shut down, indicating that demand exists in the parks, not in a specific Telegram group name. USDT can be disabled by the issuer, turning $52 million from payable inventory into a waste address in one day, which is an on-chain seizure that commercial banks cannot achieve. Tether's mention in the press release indicates that private issuance rights are being written into a public law enforcement interface. The Madagascar parks and the Southeast Asia recruitment chain are on par, showing that funding addresses are in the US, people are in third countries, and equipment evidence collection will become the next phase.
Capital will attach a compliance premium to "freezeable" and a crime premium to "hard to freeze." Elliptic provides address mapping, the Secret Service issues freezing orders, and the Department of Justice opens wallets, creating a three-tier division of labor that turns stablecoin reserves into the enforcement layer of sanctions lists. After the previous generations HuiOne and Tudou were cleared, Xinbi took over, indicating that clearing one brand does not equal clearing an entire industry.
In contrast to mixer sanctions and exchanges stopping withdrawals based on lists, the industry is moving from anonymous settlements to issuer-assisted law enforcement: those who can freeze instantly according to the US list can continue to operate at the global dollar level.
This represents a regulatory change: the significant transnational criminal organization label directly kicks market entities out of the dollar stablecoin track. The mechanism is that addresses can be frozen, parks are hard to dismantle, funds are stopped first, people are captured next, and brands are changed last.
ABAB News · Cognitive Law
- Stablecoins can be frozen by issuers, allowing them to enter the law enforcement timetable.
- Groups can change names, but the demand in parks will not disappear together.
- Disabling an address for a day is faster than cross-border pursuit of individuals to cut off inventory.