Gate.io user loses millions in crypto in scam linked to Xinbi

A Gate.io user has fallen victim to a large-scale crypto scam, with millions of dollars in digital assets disappearing. Blockchain investigator ZachXBT traces the stolen funds to addresses linked to the Chinese-language illegal marketplace Xinbi. Gate.io responds to the case, stating that it is fully cooperating with the investigation, but the chances of recovery appear slim.

Funds Already Funnelled into Xinbi Network

Transaction data shows that the stolen crypto is being channelled through multiple intermediary addresses. More than 1.5 million USDT moves from Gate.io to a suspicious address, after which nearly one million USDT is further transferred to another intermediary address. Eventually, 1.7 million USDT flows to an address linked to Newpay, along with hundreds of Ethereum. The entire route is clearly visible in the on-chain data, but that does not mean the funds can actually be recovered.

ZachXBT responds to Gate.io’s announcement, stating that tracing the flow of money does not help the victim. The funds have already been sent to addresses associated with Xinbi, a marketplace known in the Chinese-language underworld. As a result, the chance of recovery through regular channels is virtually nil.

On-Chain Investigation Points to Major Players

Blockchain analysis firm Bitrace is conducting additional research into the addresses involved. According to Bitrace, Newpay has relatively little transaction volume on its EVM addresses, and the origin of the funds deviates markedly from the typical patterns used by Chinese-language criminal networks. Those groups show a clear preference for TRC20 USDT on the Tron network, while in this case other routes are being used. More about the dominance of USDT in payments has been described in detail before.

Bitrace indicates that tracing large inflows may yield interesting information about parties with significant positions in the market. The investigation is still ongoing, and the results could shed more light on who is behind the addresses.

Gate.io says it has assembled an internal expert team to help the victim document the case and request a freeze on the funds. The company also urges the victim to file a report with the authorities and promises to fully cooperate. At the same time, Gate.io acknowledges that communication from customer service was not handled well and offers its apologies to both the victim and the broader community.