Huione Guarantee Exposed for Over $11 Billion in Cyber Scam

Elliptic researchers highlighted the involvement of Tether's USDT stablecoin in billions' worth of illicit trades on the Huione Guarantee marketplace.

Elliptic researchers have uncovered billions of dollars' worth of illicit trades on the Huione Guarantee marketplace, involving Tether’s USDT stablecoin. The findings highlight the platform's role in facilitating scams and money laundering activities in South East Asia.

According to the Elliptic report, the Huione Guarantee platform, which was launched in 2021, provided “deposit and escrow services” for various scams. Merchants on the platform offered services like money laundering, cross-border transfers, and currency conversions to cash, stablecoins, and Chinese payment apps.

“A new investigation from the Elliptic research team sheds light on online marketplace Huione Guarantee. The platform is widely used by scam operators in South East Asia, including those involved in pig butchering scams,” the report stated.

Elliptic researchers analyzed listings on the platform, engaged with sellers, and tracked funds across Tether’s blockchain sent to those sellers' addresses. This enabled them to identify and label hundreds of cryptocurrency addresses linked to the Huione Guarantee.

“I'm not sure whether Huione Guarantee was originally established with this in mind. However, it has certainly become primarily a marketplace for online scammers,” Elliptic's cofounder and chief scientist Tom Robinson said in the report.

The findings come amid growing concerns over the use of cryptocurrency and stablecoins in illicit activities. In December 2023, the South China Morning Post (SCMP) reported on the USDT stablecoin's role in facilitating the underground Chinese-linked economy in Cambodia.

The SCMP cited Huione Pay, a Cambodia-approved financial platform, which hosted numerous Telegram groups offering exchange services for crypto assets like USDT. These groups provided tools for scam operations, including international SIM cards and data on Chinese expat citizens.

Telegram group operators also offered bank cards for receiving money from scam victims and sold services like criminal background checks, company records, and bank statements, accepting USDT for their services.

This is not the first time USDT has been linked to money laundering activities. In January, the United Nations Office on Drugs and Crime (UNODC) highlighted the use of USDT as a medium for illicit activities.

Cambodia banned cryptocurrency in 2017. In 2022, Binance announced a partnership with Cambodia to assist in developing digital asset regulations.

These discoveries highlight the need for increased scrutiny and regulation of online marketplaces and social media platforms to prevent the propagation of illicit activities. Tether, on the other hand, continues to enhance its compliance efforts, having recently frozen funds in addresses featured on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons list.

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