Telegram Bans $35B Scam Marketplace. Only to See Illicit Crypto Trades Surge Elsewhere
Telegram’s recent crackdown on illicit financial activity within its platform highlights the resilience of underground marketplaces and the challenges faced by regulators in combating cryptocurrency-related crime. A joint effort by Telegram and blockchain analytics firms like Elliptic led to the banning of Huione Guarantee (Haowang Guarantee) and Xinbi Guarantee, two major Telegram-based escrow and money laundering services responsible for over $35 billion in USDT transactions. These platforms facilitated various criminal activities, including “pig-butchering” scams.
While the bans initially disrupted these operations, causing a 50% drop in Huione Guarantee’s transaction volume, the impact proved short-lived. Activity quickly migrated to Tudou Guarantee, a platform with existing ties to Huione Group, experiencing a staggering 70-fold increase in daily inflows. Furthermore, over 30 alternative guarantee platforms emerged, demonstrating the adaptability of this ecosystem. Xinbi Guarantee, despite its ban, rebounded rapidly, showcasing the ease with which these operations can circumvent regulatory measures.
Concurrently, U.S. authorities intensified their efforts against Huione Group. FinCEN proposed designating Huione Group as a primary money laundering concern, citing at least $4 billion in illicit proceeds laundered between August 2021 and January 2025. OFAC subsequently sanctioned Funnull Technology and associated wallets for their involvement in pig-butchering scams resulting in over $200 million in losses.
Despite these actions, Huione Group’s operations persist. Huione Pay, its Cambodia-based payment provider, continues functioning, alongside a crypto exchange and its own stablecoin, USDH, likely an attempt to circumvent restrictions on third-party tokens like USDT. This case underscores the limitations of platform-specific bans in addressing the broader problem of cryptocurrency-facilitated crime and the need for a more comprehensive and coordinated international response. The swift adaptation and migration of these operations highlight the dynamic and resilient nature of these criminal networks.
