The Enforcement Department of India (ED) has arrested four individuals concerning an online gaming platform to an online gaming application by the name of Fiewin. The application mimicked other legitimate platforms that allow users to earn money through online gaming and betting. Now, the application is under investigation for alleged defrauding in which victims lost over Rs. 400 crores. The users were asked to ‘top-up’ their balance to continue playing the mini-games. Reports claim once a user’s in-app account saw an influx of funds, probably as rewards, the application did not allow users to withdraw their funds, leaving them unable to recover the money.
The funds were then laundered through digital wallets linked to global crypto exchanges. The ED, a branch of law enforcement that deals with financial crimes in India, was transferred the case after many victims filed complaints with their local police. Binance’s FIU helped the ED to trace the funds and expose the fraud network. The ED subsequently discovered that the Fiewin application was part of a much bigger fraud scheme deployed by a cross-border criminal network.
The fraud syndicate used many kinds of efforts to hide their origin and the movement of the embezzled funds. The criminals also used ‘mule’ accounts where people often pay the syndicates for their bank accounts so it becomes easy to impede detection. Criminals often create a complex web of transactions to confuse law agencies as it becomes next to impossible to follow the trails.
The investigation was aided by Binance with a team of researchers going to length’s end and helped to track how money was laundered over many crypto wallets, allowing law enforcement agencies to uncover the wide network. One ED spokesperson quoted, “Public-private alliances are critical in combating sophisticated financial crimes. Binance’s specialist investigation team is a prime illustration of how private-sector companies may collaborate with law enforcement. In this situation, they gave us analytical support that helped with the inquiry.” It was later revealed that the scam was committed by the employees working alongside handlers associated with the gaming app which ultimately led to their arrest.