The Enforcement Directorate (ED) has identified and arrested four individuals in connection with an online gaming app, Fiewin. The app, initially presented as a legitimate platform for users to earn money through games, is now under investigation for its role in defrauding users of over Rs 400 crore. The money was then laundered using digital wallets linked to a global crypto exchange.
World’s largest crypto platform Binance claimed that its Financial Intelligence Unit (FIU) provided critical intelligence that helped ED in tracing the funds and uncovering the fraud network. According to a report by The Economic Times, the ED probe also discovered that the platform Chinese nationals allegedly operated the illegal betting/gaming app with the help of their Indian accomplices.
Fiewin gaming app scam: What is it and how it worked
In a report, Binance explained that the Fiewin app gained traction by promising users the opportunity to earn money easily by playing mini-games. The app allowed new users to 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.
An investigation by the ED revealed that Rs 400 crore was stolen through this scheme. This money was transferred into various cryptocurrency addresses, which were later traced back to the operation.
Local police across the country began receiving reports from victims who lost funds to the Fiewin app. Due to the growing number of victims reporting the scams, the case was escalated to ED.
Through its investigation, ED discovered that the app had been part of a cross-border criminal network it 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.
The investigation has led to the arrest of several individuals who played key roles in facilitating the fraud, working in tandem with handlers linked to Fiewin’s gaming apps. The criminals communicated via privacy-focused messaging apps and operated from various locations, ED added.
What ED said about the scam
“Public-private collaborations are crucial in tackling complex financial crimes. Binance’s specialised investigation team is a great example of how private-sector firms can work closely with law enforcement. In this case, they provided us with analytical support that contributed to the investigation,” an ED representative said.
What Binance said about the scam
“This case showcases the critical importance of collaboration between public institutions like the ED and private entities like Binance in addressing the new types of digital threats.” Binance Investigation Specialist, Ferdinando D. added.