In a recent case that has shaken India’s financial and cybercrime authorities, a ₹400 crore fraud tied to a gaming app linked to Chinese nationals has come to light. The app, known as ‘Fiewin,’ was used to run an extensive online betting and money laundering operation. This multi-layered scam involved Chinese handlers and Indian accomplices, highlighting the growing use of digital platforms for fraudulent activities.
The Arrests and Investigation
The Enforcement Directorate (ED) arrested four individuals—Arun Sahu, Alok Sahu, Chetan Prakash, and Joseph Stalin—who were key players in the scheme. They were taken into custody under the Prevention of Money Laundering Act (PMLA). The case initially originated from a First Information Report (FIR) filed at the Cossipore police station in Kolkata, alleging that unidentified persons were involved in cheating and conspiring through the ‘Fiewin’ app
The app lured users into placing bets on various games, promising high returns. Once users deposited money into the app, these funds were routed through several Indian bank accounts controlled by the accused. According to the ED, the funds were then converted into cryptocurrency, primarily through the Binance platform, and transferred to wallets operated by Chinese nationals
Role of Indian Accomplices
The Indian nationals involved in the scam acted as “recharge persons,” allowing the scammers to use their bank accounts to funnel the money. Arun and Alok Sahu, based in Rourkela, Odisha, played significant roles in the money transfer chain, while Chetan Prakash, an engineer from Patna, facilitated the conversion of Indian rupees into cryptocurrency. Joseph Stalin, a software engineer from Chennai, even aided Chinese national Pie Pengyun in becoming a co-director of his company, Studio 21 Pvt Ltd, which was used to make bulk payouts to users of the app
Modus Operandi
The scam’s success hinged on a sophisticated network involving Chinese nationals who communicated with their Indian counterparts via the encrypted messaging platform Telegram. After users deposited money into the Fiewin app, it was transferred to the accounts of the Indian ‘recharge persons.’ These individuals received commissions for their services and converted the laundered funds into cryptocurrency. The funds were eventually deposited into Binance wallets controlled by Chinese nationals
One of the key figures, Joseph Stalin, facilitated the conversion of cryptocurrency into Indian rupees through Binance’s Peer-to-Peer (P2P) mode, making it harder for authorities to trace the transactions. This operation allowed the Chinese handlers to cash out the illegal earnings in India while maintaining a secure, anonymous flow of funds across borders
Broader Implications
This case underscores the increasing use of cryptocurrency in money laundering and illegal financial activities. The reliance on digital platforms like Binance, which operates across multiple jurisdictions, complicates law enforcement efforts to track the flow of illicit money. Furthermore, the involvement of Indian nationals who acted as intermediaries highlights the vulnerability of the local financial system to exploitation by international fraud networks.
The scam also reflects the challenges that law enforcement agencies face in regulating online gaming platforms, which often operate in grey areas of the law. Many such platforms target unsuspecting users with the promise of easy money, only to trap them in fraudulent schemes. The Fiewin app case is a stark reminder of the risks posed by unregulated online betting and the need for stricter regulatory oversight of both online gaming and cryptocurrency exchanges
Conclusion
As investigations continue, authorities are focusing on identifying other individuals and networks involved in this massive fraud. The crackdown on the Fiewin app and its operators marks a significant step in combating online financial fraud, but it also raises concerns about the evolving tactics used by international crime syndicates, particularly those involving cryptocurrency. The case serves as a wake-up call for stricter regulations and more robust cybercrime laws to protect users from similar scams in the future.
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