U.S. Department of Justice sanctions "new coin" fraud platforms and freezes $52 million in cryptoc

U.S. authorities crack down on the new coin guarantee ecosystem, freezing crypto assets on suspected fraudulent platforms

U.S. authorities are disrupting parts of the Xinbi Guarantee ecosystem, seizing crypto assets associated with the suspected fraudulent market, and coordinating criminal and sanctions actions aimed at cutting off the communications and payment infrastructure behind large-scale fraud. On Wednesday, the U.S. Department of Justice (DOJ) said its "Fraud Center Commando Force" seized two wallets used to collect payments from suppliers with a total value of approximately $12 million, and sought court authorization to impose restrictions on 47 other wallets believed to be related to online money laundering activities in the new coin. At the same time, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) designated the new coin as a major transnational criminal organization and imposed sanctions on technology support providers SafeW Technology (Singapore) and Anwen Technology (Cambodia), accusing them of supporting the network.

Core Points

• The Justice Department's actions target payment infrastructure (seized and restricted wallets) and custody channels in the market, including Telegram infrastructure associated with suppliers.
• OFAC's sanctions cut off the new currency's access to U.S. -related property and generally prohibited Americans from trading with designated entities.
• The Ministry of Finance said that as law enforcement pressure increases, the new coin has shifted some of its operations-particularly merchants and money laundering workflows-to SafeW's encrypted messaging application.
• Law enforcement characterized the case as an attempt to undermine the broader "service layer" that supports industrial-scale fraud operations, rather than just targeting individual scammers.
• Ari Redbord, policy head at TRM Labs, pointed out that after the early platform crash, the new coin has become a large-scale "custody and withdrawal layer" in the Southeast Asian fraud market.

Justice Department Action: Wallet Seizure and Expansion Restrictions

The Justice Department stated that based on a court order, its "Fraud Center Commando Force" seized two wallets connected to the new currency and used to receive payments from suppliers. The agency also reported that it requested restrictions on 47 additional wallets believed to be part of the platform's money-laundering channels.

Based on an unsealed writ cited by the Justice Department, the Federal District Court for the District of Colombia on September 7 authorized the seizure of the Telegram channel used to host and promote marketing services. The writ describes that suppliers use these channels to promote money laundering services, customized fraudulent investment websites and services related to recruitment in Southeast Asia's "fraud parks".

This move marks a shift in law enforcement focus: Prosecutors are no longer focusing solely on end actors, but are targeting operating "pipelines"-that is, where fraudulent recruitments occur, services are sold, and money flows-helping to make fraudulent networks more scalable.

Sanctions on new coins and technology providers

As part of the coordinated action, the U.S. Treasury Department announced the designation of the new coin as a major transnational criminal organization. The Treasury also imposed sanctions on SafeW Technology and Anwen Technology, accusing them of providing technical and financial support for the new currency.

Treasury's statement links specific roles to the alleged ecosystem. The document states that as censorship increases, Xincoin will begin migrating its merchants and money laundering networks to SafeW's encrypted messaging application around June 2025. The Treasury also accused Anwen of developing XinbiPay (also known as NewPay)-a crypto-wallet and payment application used by the marketplace.

The actual effect of OFAC sanctions is clear: it aims to prevent new coins and designated supporting entities from entering U.S. property and restrict the trading behavior of Americans. For companies that focus on compliance-exchanges, payment processors, service providers and other cryptocurrency-related companies-these designations add to the compliance burden as more counterparties and infrastructure require screening and risk control.

The Ministry of Finance further stated that since around 2022, the new coin has processed more than US$24 billion in cryptocurrency transactions mainly through operations in Southeast Asia, and its platform has been used by North Korean hackers and entities associated with the sanctioned Prince Group. The Treasury has linked the activity of the new coin to broader geopolitical threat dynamics, emphasizing the intersection of fraudulent market models and sanctioned entities rather than operating in isolation.

Why investigators emphasize hosting, communications and the "service layer"

U.S. officials thanked Tether for its assistance in the investigation, implying that the investigation involved tracking stablecoin-related traffic or relevant compliance data to build evidence in the case.

Enforcement strategies also reflect a growing understanding of how industrial-scale fraud operates. Large fraud networks often rely on a parallel "marketplace" that sells various components: accepting payments/trusteeship like functions, tools to convert funds into available balances, hosting or distribution channels for recruitment and services, and templates for fraudulent websites. By targeting wallets and Telegram hosting channels, authorities aim to cut off the flow of funds and the layer of publicity that drives enrollment.

Ari Redbord, global policy director at TRM Labs, pointed out in an interview that the new coin filled the gap after Huione's collapse. He said that the new currency has become the preferred "custody and withdrawal layer" for fraud parks in Southeast Asia, operating on an "industrial-scale" and moving more than US$36 billion in funds.

This perspective is crucial for readers trying to interpret enforcement actions: It suggests that the problem is not just a single market operator, but a "service layer" that can be migrated and adapted when previous platforms fail.

Sanctions momentum and follow-up observations

The latest U.S. designation comes after the UK previously imposed sanctions on the new currency. Previous reports showed that the British government imposed sanctions on the new coin on March 26, freezing the new coin's assets in the UK and prohibiting the platform from entering the UK's financial, trade and travel networks.

As the Justice and Treasury Departments act simultaneously, market participants should expect more follow-up review of the cryptographic tracks commonly used in fraudulent networks, especially wallet infrastructure and communication channels that facilitate vendor operations and the routing of funds. For the compliance team, OFAC's new designation of new coins and proposed technology providers may require immediate updates to the screening process and supplier risk assessments.

Readers should pay attention to additional court documents related to restricted wallets and further disclosure steps to link the closure of Telegram channels to downstream service providers. Equally important is whether new "custody/withdrawal" and encrypted message routes will emerge to replace the capabilities the authorities targeted in this case.