Caroline Bishop
Aug 30, 2024 09:27
Chainalysis’ mid-year update highlights the rise of China-based CSAM networks and the evolution of cryptocurrency scams, including the infamous pig slaughter incident.
According to Chainalysis’ latest mid-year update, 2024 saw a significant increase in China-based networks trading in child sexual abuse material (CSAM), an evolution in cryptocurrency fraud tactics, and the infamous pig slaughter incident.
Key Results
The Chainalysis report highlights several concerning trends in the crypto crime space. This update explores the on-chain activity surrounding CSAM and the latest fraud trends dominating the crypto landscape.
China-based CSAM network
Chainalysis reports a significant increase in China-based CSAM sites since late 2023. These vendors are attracting a significant portion of global CSAM traffic, peaking at 38.8% in Q1 2024. Many wallet owners are purchasing long-term access to these illicit services, with some transactions indicating near-permanent access.
The Internet Watch Foundation (IWF) noted that it is difficult to determine the exact reason for the surge. A spokesperson said the increase could be due to an increase in reports or the emergence of new networks.
Fraud trend
Crypto fraud has also evolved, with fraudsters adopting more dynamic and profitable strategies. The report identified pig slaughter as the most profitable type of fraud this year (YTD). One Myanmar-based fraud operation has so far generated at least $101.22 million in 2024.
Pig slaughter scams involve scammers entering into a fake romantic relationship with their victims and then taking their money as an investment opportunity. These scams are often perpetrated by people who have been trafficked and forced to work in labor camps in Southeast Asia.
Moreover, scammers are shifting from broad Ponzi schemes to more targeted campaigns, such as work-from-home scams and address contamination.
Huione Warranty and Laundry Network
Huione Guarantee, a marketplace linked to Cambodian conglomerate Huione Group, has been exposed as a major player in facilitating cybercrime. The platform has processed more than $49 billion in cryptocurrency transactions since 2021, significantly exceeding previous reports.
Huione Guarantee operates as a peer-to-peer marketplace that connects buyers and sellers, often via Telegram handles. Many of the transactions on this platform involve illegal activities, including pig slaughter, investment fraud, and money laundering.
According to on-chain analysis, Huione Pay is active on Ethereum and TRON and has seen significant inflows. The platform’s connections include addresses reported as scams, stolen funds, and entities sanctioned by the Office of Foreign Assets Control (OFAC).
The Chainalysis report highlights that Huione has built an extensive network, connecting it to large criminal organizations and various illicit activities.
For more details, check out the full report from Chainalysis.
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