How USDT Fueled $11 Billion Cyber Scams

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

Different merchants manage a widespread Chinese-language network with numerous fraudulent app channels.

Huione Guarantee Exposed for Over $11 Billion in Cyber Scam

Huione Guarantee, affiliated with Cambodia’s Huione Group, emerged as a promising marketplace for real estate and cars in 2021. However, beneath a façade of legitimacy, Elliptic researchers discovered fraudulent activity. The platform provided “deposit and escrow services” to ensure transaction security.

“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,” part of the report read.

With payments primarily made in USDT stablecoin, Elliptic researchers discovered over $11 billion in transactions processed since the platform’s debut. Out of these, $3.4 billion accounts for 2024. 

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.

Read more: Crypto Scam Projects: How To Spot Fake Tokens

Notably, not all transactions conclusively point to illegal activities. However, overwhelming evidence suggests the platform’s cognizance of illicit businesses on its marketplace, as third-party merchants openly advertise money laundering services.

The services include cross-border transfers and currency conversions to cash, stablecoins, and Chinese payment app transfers.  The merchants also specify different fraud and proceeds handling forms, suggesting their awareness of the risks involved.

“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. 

While Huione is not the only marketplace propagating online crypto scams, according to Elliptic, none are this big. The Huione Group is a Cambodian conglomerate business associated with Cambodia’s ruling Hun family,” including Prime Minister Hun Manet. The firm did not immediately respond to BeInCrypto’s request for comment.

Huione and USDT Stablecoin Involvement in Underground Economy

In December 2023, the South China Morning Post (SCMP) reported the USDT stablecoin’s enabling role in the underground Chinese-linked economy of Cambodia. Among the cited activities was evading capital controls for Chinese nationals by using it as an exchange device to acquire tools to facilitate online scams.

The SCMP cited Huione Pay, a Cambodia-approved financial platform, revealing that it hosted multiple Telegram groups offering exchange services for cryptocurrency assets, including USDT. According to the investigation, the groups provide tools that enable scam operations involving international SIM cards and data on Chinese expat citizens.

Telegram group operators also marketed bank cards to receive money from scam victims. They also advertised services like criminal background checks, company records, and bank statements, accepting USDT for their services.

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

Read more: Crypto Social Media Scams: How to Stay Safe

Cambodia has banned cryptocurrency since 2017. In 2022, Binance committed to aiding Cambodia, located in Mainland Southeast Asia, in developing digital asset regulations. Under the terms, Binance rendered its technical expertise and experience in the field to help Cambodia’s Securities and Exchange Regulator (SERC) develop its legal framework for the digital asset market.

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 continues to improve its compliance push, recently freezing funds in addresses featured on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons list.