Elliptic exposes $11B scam network via Huione Guarantee

Elliptic’s investigation uncovers a $11 billion scam network through Huione Guarantee, highlighting the role of Tether in money laundering and cyber scams.
Elliptic’s investigation uncovers a $11 billion scam network through Huione Guarantee, highlighting the role of Tether in money laundering and cyber scams.

Update July 10, 10:50 am UTC: This article has been updated to include quotes from Tether.

Huione Guarantee, an online marketplace run by the Cambodian conglomerate Huione Group, has been implicated in facilitating online scams in Southeast Asia.

According to the latest Elliptic Research report, the platform engaged in transactions surpassing $11 billion, a substantial portion linked to money laundering and cyber scams.

Speaking with Cointelegraph, Tom Robinson, co-founder and chief scientist at Elliptic, explained that the team could “quantify” the cryptocurrency transactions due to “the transparency of the blockchain.”

“This aspect, of course, also means that these crypto transactions can be tracked and blocked in a way that is not possible with other payments.”

Related: AI-driven crypto crime is only just beginning — Elliptic report

Services offered and scam operations

Huione Guarantee’s marketplace operates primarily in Chinese and involves thousands of instant messaging app channels, each managed by separate merchants.

These merchants offer various services fundamental to the operation of cyber scams, including selling personal data, money laundering and software and web development for scam websites.

The platform also offers tools and equipment utilized for the imprisonment and torture of workers in scam compounds.

While the platform uses payment methods such as bank transfers and payment apps, the marketplace predominantly uses Tether (USDT), which is far easier to track than traditional fiat flows.

A Tether spokesperson told Cointelegraph that analysts who publicize their findings “without engaging directly with counterparties” like regulators, Tether or law enforcement limit the ability “to freeze illicit activities.”

“This encourages a bystander effect, where individuals and, in this case, companies, observe wrongdoing but choose to record it for social media engagement and notoriety, rather than prioritize intervention.”

Related: Investors lose $1.6M after Doja Cat’s X reportedly hacked to promote scam coin

Elliptic’s investigation

Elliptic’s latest report investigating Huione Guarantee led to the labeling of hundreds of crypto addresses associated with the platform and its merchants.

Robinson told Cointelegraph that businesses could use blockchain analytics “to ensure that they or their customers are not transacting with services such as Huione Guarantee.”

“We have labeled several hundred addresses in our tools that are used by these entities, and our customers can screen transactions and wallets for links to them.”

This identification enables exchanges and other businesses to screen transactions and prevent the continued laundering of illicit funds.

“Law enforcement can [...] trace these payments and pursue those responsible for these scams. Crypto is a weak point of those scams that make use of it, which can be used to help bring those responsible to justice.”

Related: Coinbase-posing scammers steal $1.7M from a user amid a string of attacks

AI crypto crimes are just beginning — Elliptic

In Elliptic’s 2024 report, the team highlighted the increasing use of artificial intelligence for illicit activities, including state-sponsored cyberattacks and deepfake scams.

Fraudulent schemes involving deepfake videos of prominent figures, like Elon Musk and former Singaporean Prime Minister Lee Hsien Loong, are reportedly on the rise.

The report revealed dark web forum discussions on using AI to reverse-engineer crypto wallet seed phrases and bypass authentication systems.

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