Blockchain detectives at analytics firm Elliptic alleged in a new report released Wednesday that Cambodia-based marketplace Huione Guarantee was involved in money laundering and other crimes.
According to Elliptic, cryptocurrency wallets associated with Huione and independent merchants have received at least $11 billion since its founding in 2021. Elliptic presents this figure as a conservative estimate.
“Not all of these transactions can be definitively linked to fraud or other illicit activity, but the nature of Huione Guarantee’s activities suggests that the majority of these payments are related,” the researchers wrote.
According to Elliptic, Tether’s USDT
+0.12%
Stablecoins are one of the most popular payment options on the site, and payment apps and bank transfers are also supported.
Huione Guarantee is part of the larger Huione Group, which operates a payment app called Huione Pay and has interests in the insurance, aviation, and real estate industries across Southeast Asia. Elliptic also claims that Huione executives have ties to Cambodian Prime Minister Hun Manet.
In a six-page document, Elliptic researchers claim that the supposedly “neutral” marketplace has degenerated into a den of criminal activity. Because traders run their own instant messaging app channels, Huione claims it has no knowledge of “the specific business of its customers” or the nature of the money flowing through the platform.
Elliptic therefore claims that Huione turned a blind eye to numerous ongoing crimes, including merchants explicitly offering money laundering services, “sexual exploitation” schemes, and malware.
Several screenshots purportedly showing conversations between merchants and customers show people attempting to launder profits from the “Pig Slaughter” scam, an increasingly common investment fraud scheme that uses social engineering to steal victims’ funds.
Other advertisements in the report include electric shock collars used to confine exploited workers in “scam complexes” in countries such as Myanmar, Laos, and Cambodia. U.S. Institute of Peace found Industrial-scale fraud relying on forced labour is “spreading rapidly” across Asia.
While censorship-resistant blockchain networks facilitate global crime, Elliptic researchers note that “investigators and compliance teams can use blockchain analytics to proactively detect and disrupt USDT payments.”
The company said it has identified and labeled “hundreds of cryptocurrency addresses” controlled by Huione, meaning “exchanges and other businesses accepting cryptocurrency assets can review these transactions to ensure these funds are no longer being laundered.”
Disclaimer: The Block is an independent media outlet providing news, research and data. As of November 2023, Foresight Ventures is the largest investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block continues to operate independently to provide objective, impactful and timely information on the cryptocurrency industry. Below are the current financial disclosures.
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not provided or intended to be legal, tax, investment, financial or other advice.