Fiewin App Scam: ED Uncovers ₹400 Crore Online Gaming Fraud Linked to Chinese Nationals

The Enforcement Directorate (ED) has exposed a major financial fraud involving the Fiewin app, an online gaming platform that lured users with the promise of easy earnings through mini-games. The investigation has revealed that approximately ₹400 crore was misappropriated, and several Chinese nationals were implicated in the scheme.

How the Fiewin App Scam Operated

The Fiewin app attracted a large user base by offering an easy way to earn money through simple mini-games. New users could quickly create an account and participate in games, with the option to ‘top up’ their in-app balance using various payment methods. However, once users accumulated substantial funds, the app stopped allowing withdrawals, leaving users unable to recover their money.

According to the ED’s investigation, Chinese nationals, with the help of their Indian collaborators, orchestrated this elaborate fraud. Funds collected from users were funneled into accounts managed by individuals known as “recharge persons,” who allowed their bank accounts to be used in exchange for a commission. The money was then converted into cryptocurrency and transferred to the accounts of Chinese nationals, creating a complex web of transactions that hindered detection.

Binance Supports ED’s Investigation

Binance, the world’s largest cryptocurrency exchange, played a crucial role in supporting the investigation. The ED, with Binance’s assistance, traced the misappropriated funds to multiple cryptocurrency addresses linked to the operation. So far, approximately ₹25 crore has been frozen as part of the probe.

Key Arrests and Involvement of Indian Nationals

Several Indian nationals have been arrested for their roles in facilitating the scam:

• Arun Sahu and Alok Sahu (Rourkela, Odisha): Acted as “recharge persons” who collected money from online gamers and deposited it into their accounts. The funds were then converted into cryptocurrency and sent to Chinese nationals’ wallets.
• Chetan Prakash (Patna, Bihar): An engineer who played a significant role in converting funds from recharge persons’ accounts into cryptocurrency.
• Joseph Stalin (Chennai, Tamil Nadu): A software engineer who assisted Chinese national Pie Pengyun in becoming a co-director of his company, Studio 21. Pengyun used Stalin’s company for bulk payouts, which helped gain the initial trust of online gamers, encouraging them to place larger bets.

These individuals, along with other unnamed accomplices, communicated via privacy-focused messaging apps and operated from various locations across India.

A Complex Cross-Border Network

A Complex Cross-Border Network

The ED’s investigation revealed that the Fiewin app was part of a larger cross-border criminal network designed to obfuscate the origin and movement of illicit funds. By using bank accounts of “mules” and cryptocurrency wallets, the network created a sophisticated system to launder money, complicating the efforts to trace the funds.

Impact on India’s Economy

The ED has frozen several cryptocurrency accounts linked to the Chinese nationals involved in the scam, amounting to about ₹25 crore. The investigation has highlighted the vulnerabilities of online gaming platforms and the broader implications of cross-border financial fraud. This case underscores the need for stringent regulatory measures to protect Indian consumers and prevent the exploitation of the country’s financial systems by foreign entities.

Ongoing Investigation and Future Actions

The ED and Binance continue to collaborate closely to further unravel the criminal network behind the Fiewin app scam. Their combined efforts aim to expose the full extent of the fraudulent activities and hold all involved parties accountable. As the investigation progresses, it serves as a stark reminder of the risks associated with unregulated online gaming platforms and the importance of consumer vigilance.

Conclusion

The Fiewin app scam is a significant example of how online platforms can be manipulated for financial fraud, impacting thousands of users and siphoning vast sums of money across borders. The ED’s crackdown, supported by Binance, represents a decisive step towards dismantling such criminal networks and safeguarding the Indian economy from similar future threats.

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