Elliptic Uncovers $11B Scam Network Through Huione Guarantee

scam

Elliptic’s report details how the Huione Guarantee marketplace enabled money laundering and cyber scams through Tether transactions.

Blockchain analytics firm Elliptic has uncovered a transaction of $11 billion linked to money laundering, facilitated through Huione Guarantee, a Cambodian online financial platform associated with the nation’s ruling family, which serves as a marketplace for merchants, some of whom have customers involved in scams. The recent announcement highlights the vulnerabilities within the ecosystem. 

The Elliptic research report noted that transactions on the platform exceeded $11 billion, with a significant portion associated with money laundering and cyber scams. 

Services Provided and Fraudulent Operations 

Huione Guarantee primarily operates in Chinese and comprises thousands of instant messaging app channels, each managed by different merchants. 

These merchants provide essential services for cyber scams, including selling personal data, money laundering, and developing software and websites for fraudulent activities.  

Despite its significant involvement in transactions, Huione Guarantee claims to be a neutral platform that is not responsible for the goods or services being sold. 

The platform supports bank transfers and payment apps. The marketplace primarily uses USDT, the world’s largest stablecoin, because it is easier to trace funds than traditional fiat currency transactions.

In January, the United Nations Office on Drugs and Crime (UNODC) highlighted the popularity of USDT as a medium for money laundering. In response, USDT issuer Tether stated that the stablecoin was being unfairly targeted. 

Attracting Users with Fake Crypto Projects

The report further stated that the scam attracted victims with fake projects. These were supported by falsified endorsements and guarantees from Huione Guarantee, promising lucrative returns. After receiving the funds, the scammers swiftly transferred the money through a series of wallets.  Another strategy used was to offer software and web development services, which included developing scam crypto investment websites created to lure victims to their crypto. 

As one of the tools used in facilitating criminal activities, Elliptic emphasized the growing use of artificial intelligence, which can be used for facial changes, cyber attacks and deepfake scams.