Cambo-Chinese Firm Tied to Crypto Scams, Money Laundering

Crypto scams have become a hugely profitable illegal industry, as most of the world probably knows, but the big news this month has been the naming of a Cambodian-Chinese platform allegedly used by multiple scammers in Asia.

Elliptic, a crypto-tracing firm, said last week that its researchers had found that Huione Guarantee is a “multi-billion dollar marketplace used by online scammers” and that one of the group’s businesses “is actively involved in laundering proceeds of scams from around the world.”

Huione Guarantee (“汇旺担保”) is part of Huione Group, a Cambodian conglomerate with links to Cambodia’s ruling family, it alleges, and the scale of the money involved is enormous: merchants have allegedly done $11 billion in transactions in the three years since it was set up, during the Covid-19 pandemic. That includes $3.4 billion this year.

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Huione Guarantee has been described as “a deposit and escrow service for peer-to-peer transactions that lets users buy and sell over the Telegram messaging service with the cryptocurrency Tether” – USDT, the world’s largest stablecoin, which can be traced via blockchain, to ensure that they do not defraud each other.

Elliptic was allegedly able to trace the funds flows, but it said payment apps and bank transfers were also used. It said Huione Guarantee claims to be a neutral platform with no responsibility for what is being sold.

“However the majority of the goods and services on offer today appear to be targeted squarely at cyber scam operators.”

The Golden Sand Hotel and Casino is seen in the Cambodian beach resort Sihankouville, a town where Chinese gangsters are said to have set up scam centres during the Covid-19 pandemic. They are believed to operate with local authorities allegedly linked to powerful politicians. Photo: Wikimedia Commons.

‘A marketplace for scammers’

The figures involved are massive, but not a surprise, given a report launched in Bangkok last month by Jason Tower from the US Institute for Peace and other experts, who estimated that global scam earnings last year totalled about $64 billion.

Elliptic’s report has put a spotlight on a platform on which third-party merchants allegedly offer not only money laundering, but other services for this illegal ecosystem, such as production of deepfakes, website development for “pig butchering” scams, and items that can be used to track and subdue people held in forced labour sites.

“I’m not sure whether Huione Guarantee was originally established with this in mind, but it’s certainly become primarily a marketplace for online scammers,” Tom Robinson, Elliptic’s cofounder and chief scientist, was quoted as telling Wired.

Robinson said Elliptic knew of about 10 platforms like Huione Guarantee that are used by crypto scammers, but none were as big as it. “This is the largest public guarantee platform for illicit crypto transactions that we’re aware of,” he said.

The nasty part of this industry is the compounds that have been set up in semi-lawless places like Shwe Kokko on the Thai-Myanmar border, Sihanoukville in southern Cambodia, or the Golden Triangle SEZ in northern Laos, where thousands of job-seekers from dozens of countries have have been trafficked or lured to, and are then tortured and forced to engage in online scamming.

Elliptic said its researchers found “shock-enabled GPS tracking shackles and electric batons for sale” on the Huione Guarantee platform, used in the scam centres where enslaved victims are forced to work.