In a significant blow to the world of illicit cryptocurrencies, the notorious marketplace known as Haowang Guarantee recently shut down its doors. This follows a major crackdown by Telegram, which took decisive action against the platform by removing access to Haowang’s NFTs, community groups, and related channels on May 13, effectively undermining its entire operational framework.
Operating primarily on Telegram, Haowang engaged in a spectrum of illegal activities including the trafficking of personal data and tools for illicit online transactions, as noted by the blockchain analytics company Elliptic.
Connections to Broader Criminal Networks and Investigations
According to an updated report from Elliptic, Haowang had facilitated transactions exceeding $27 billion, primarily utilizing the USDT stablecoin. This positions it as the largest known illegal cryptocurrency marketplace to date.
The actions of Telegram came as a direct response to increasing pressure from blockchain analysts and law enforcement agencies focusing on the urgent need to combat crypto-related crimes on messaging platforms. Notably, Telegram’s associations with cybercriminal networks in Southeast Asia, particularly those involved in cryptocurrency fraud, made it a significant player in regional financial misconduct.
Despite rebranding from Huione Guarantee, Haowang remains linked to the Huione Group, based in Cambodia. The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has recently moved to impose sanctions on Huione, alleging it was involved in a significant “money laundering operation” via its network of companies.
This network includes Haowang, the payment processor Huione Pay, and the cryptocurrency exchange Huione Crypto. FinCEN claims that these entities collectively laundered upwards of $4 billion in illicit funds, with some of that money tracing back to North Korean cybercriminal activities.
Central to this clandestine financial flow is USDH, a stablecoin issued by the Huione Group. The Elliptic report indicates that USDH played a vital role in helping launder money and executing high-volume transactions that could easily bypass traditional financial safeguards.
The increasing utilization of stablecoins in such laundering operations has caught the eye of international regulators, who are now moving toward stricter regulations on digital asset trades. In Haowang’s case, USDH was the predominant currency used, enabling everything from deceptive financial schemes to the trafficking of personal information.
Heightened Oversight and Ongoing Challenges
Telegram’s shutdown efforts have not been limited to Haowang alone; another platform, Xinbi Guarantee, was also targeted for its involvement in illegal activities like money laundering, intimidation, and human trafficking.
The dismantling of both Xinbi and Haowang has resulted in a considerable disruption of what Elliptic classifies as two of the largest illicit marketplaces operating on Telegram, together handling transactions worth more than $35 billion in USDT.
Despite these setbacks, reports suggest that both Haowang and Xinbi are striving to re-establish their operations, with early efforts underway to regain footing on Telegram.
Elliptic remains vigilant, keeping tabs on over 30 other platforms mimicking Haowang’s operational model. As law enforcement and private organizations heighten their scrutiny of crypto-associated criminal networks, the closure of Haowang symbolizes a crucial step in the ongoing battle against financial illicitness in the digital asset arena.
This incident also underscores the vital role that messaging platforms like Telegram play in either facilitating or mitigating the use of cryptocurrencies for unlawful activities, as regulators push for greater transparency and accountability within the financial ecosystem.
Image created with DALL-E, Chart sourced from TradingView
