Adding an internal communication service known as “ChatMe,” a cryptocurrency exchange (Huione Crypto), and a US dollar-backed stablecoin (“USDH”) suggests that Huione Guarantee is looking to become a truly self-sufficient, full-service platform. . The USDH website, Elliptic researchers say, describes it as “unrestricted” by regulators around the world and says it “avoids common freezing and transfer restrictions” that may apply 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, researchers estimate the cumulative total is $24 billion. The platform’s various expansions are contributing to the rise, but ultimately its transfer and escrow services are the core service.
“With the Huione Guarantee, the main thing being sold is actually the laundering of online scam product,” Robinson alleges. “The vast majority of funds circulating in the market are related to providers who openly offer money laundering services and talk about the types of fraud proceeds they are willing to accept.”
Meanwhile, as the business grows, researchers say 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, such as Huione Pay. The marketplace has even been rebranded as “Haowang Guarantee,” although Huione Group confirmed to researchers that Huione Guarantee remains a “strategic partner and shareholder.”
“The Huione Assurance Group on Telegram continues to be widely used, with more than 139,000 users,” says Jason Tower, country director for Myanmar at the US Institute of Peace. “Telegram groups are used to move large sums of cryptocurrency at a significant discount. In comparison, competing platforms have lost a significant number of users. This is probably the result of repression by the Chinese government.”
Robinson says an initial analysis by Elliptic found that around $6 billion passes through a Telegram bot that is supposedly “used primarily for online gambling on Huione Guarantee.” The researchers’ analysis suggests this could also be linked to money laundering. Users deposit cryptocurrency into a wallet and can then move their balance to individual mini-games that exist in their own Telegram groups. The “games” are extremely rudimentary and do not seem to require any skill. Players also tend to bet consistently for very long periods of time, bet similar amounts, and leave precise intervals between their bets. All of this “taken together suggests automated gambling for the purposes of money laundering rather than entertainment,” Robinson alleges.
Despite Huione Guarantee’s apparent strategy of being too big to fail, Elliptic researchers say the platform is far from being completely self-sufficient. Huione stablecoin and cryptocurrency exchange has so far failed to record significant transaction volumes, says Robinson, despite some promotion within its existing communication channels. As the market works to drive the transition, its continued reliance on third parties could still be a weakness, at least for now.
“Huione Guarantee still relies on some centralized infrastructure, Tether and Telegram,” says Robinson. “I think there is now an opportunity to suppress it through those service providers. “I think if we wait too long, there is a chance that they will move into their own infrastructure and that becomes more challenging.”