The scam ecosystem has been booming around the world, with criminals honing a handful of strategies to trick victims into voluntarily sending their money into the abyss. And as the cash—or, typically, cryptocurrency—flows in, a set of digital services and infrastructure offerings have increasingly emerged. The scam economy helps criminals with everything from creating fake social media pages to buying SIM cards—and, crucially, with money laundering. Now, researchers say that in the pantheon of dark web marketplaces, the “largest illicit online marketplace” ever is now one that sells services to other scammers rather than focusing on drugs or other contraband.
New findings from the crypto-tracing firm Elliptic show how one of the biggest players in that sphere, Huione Guarantee, has likely enabled $24 billion in gray market transactions—with the volume of activity on the platform rocketing up 51 percent since initial investigations last summer. At the same time, the platform is offering more services than ever, including launching its own messaging app, stablecoin, and cryptocurrency exchange. Expanding the empire means more profits for administrators, but it may also be part of an effort to, according to Elliptic, flood the zone and protect Huione Guarantee from potential law enforcement action or technological crackdowns.
“What platforms really do is help scammers to scale up their operations, and it’s really enabled the industrialization of online scams,” says Tom Robinson, Elliptic’s cofounder and chief scientist. “Huione Guarantee is a key node in this network of facilitators of online scams. Preventing it from operating would have a significant impact on online scams and would have an immediate beneficial effect on victims and potential victims.”
A Chinese-language platform that has wider links to businesses associated with the Cambodian ruling family, Huione Guarantee first emerged in 2021 as investment scams—or so-called “pig butchering” scams—from Southeast Asia boomed. One of the platform’s centerpiece features is a deposit and escrow service, connecting buyers and sellers to help facilitate their transactions. But the service also acts as a general store that fulfills every scammer’s needs, with sellers hawking victim contact details, deepfake tools to trick targets, fake investment websites, and more.
Huione Guarantee mostly operates through the social media app Telegram, organized around groups and bots that have tens of thousands of members and followers. Transactions typically take place using the Tether stablecoin. Telegram did not return WIRED’s request for comment about Huione Guarantee’s activity and growth on its platform. Tether also did not respond to a request for comment.
Huione Guarantee itself did not immediately respond to WIRED’s request for comment. However, last year, following the publication of Elliptic’s previous research, Huione Guarantee posted a statement to its website where it claimed to be an “information publishing and guarantee trading platform,” and the services “are provided by third-party merchants and we only provide guarantee services.” The company also said that after it saw Elliptic’s previous report, it removed some sellers.
Adding an in-house communication service known as “ChatMe,” a cryptocurrency exchange (Huione Crypto), and US dollar-backed stablecoin (“USDH”) suggests that Huione Guarantee is looking to become a truly full-service, self-sufficient platform. The website for USDH, the Elliptic researchers say, describes it as “not restricted” by regulators around the world and says that it “avoids the common freezing and transfer restrictions” that can be applied to other cryptocurrencies.
In its work last year, Elliptic found that in the first three years of its operation, Huione Guarantee sellers moved around $11 billion on the platform. Less than a year later, the researchers now estimate that cumulative total to be $24 billion. The platform’s various expansions are all contributing to the increase, but ultimately its escrow and transfer services are the core service.
“With Huione Guarantee, the primary thing being sold is actually laundering of the proceeds of online scams,” Robinson alleges. “The vast majority of the funds that are going through the marketplace is in relation to vendors that are openly offering money laundering services who talk about the types of fraud proceeds that they’re willing to accept.”
Meanwhile, as business booms, the researchers say that the platform’s owner, Huione Group, has worked to downplay its association with the marketplace and the connection between Huione Guarantee and other linked services, like Huione Pay. The marketplace has even been rebranded as “Haowang Guarantee,” though Huione Group confirmed to the researchers that Huione Guarantee is still a “strategic partner and shareholder.”
“The Huione Guarantee Group on Telegram continues to be used extensively, with over 139,000 users,” says Jason Tower, the country director for Myanmar at the United States Institute of Peace. “Telegram groups are used to move large sums of cryptocurrencies at a significant discount. By comparison, competing platforms have lost a significant number of users. This is likely a result of crackdowns by the Chinese government.”
Robinson says an initial analysis from Elliptic has found around $6 billion passing through one Telegram bot that is allegedly “used primarily for online gambling on Huione Guarantee.” The researchers’ analysis suggests this may also be allegedly linked to money laundering. Users deposit crypto into a wallet and then can move their balance into individual minigames that exist in their own Telegram groups. The “games” are extremely rudimentary, though, and don’t seem to involve any skill. Players also tend to bet consistently over very long periods of time, wager similar amounts, and leave precise intervals between their bets. All of this “together suggests automated gambling for the purposes of money laundering rather than entertainment,” Robinson alleges.
In spite of Huione Guarantee’s apparent too-big-to-fail strategy, the Elliptic researchers say that the platform is far from being totally self-sufficient. So far, Huione’s stablecoin and cryptocurrency exchange have failed to register significant volumes of transactions, Robinson says, despite some promotion within its existing communications channels. As the marketplace works to push the transition, its ongoing reliance on third parties could still be a weakness—at least for now.
“Huione Guarantee is still dependent on certain centralized infrastructure, Tether and Telegram,” Robinson says. “I think there is an opportunity now to suppress it through those service providers. I think if we wait too long, then there is a chance that they move to their own infrastructure and that becomes more challenging.”
Source : Wired
