The addition of a built-in communication service called “ChatMe”, a cryptocurrency exchange (Huione Crypto), and a US dollar-backed stablecoin (“USDH”) show that Huione Guarantee is looking to become a fully-fledged and self-sufficient platform. . USDH’s website describes it as “unrestricted” by regulators around the world, saying it avoids “common freeze and transfer restrictions” that can apply to other cryptocurrencies, according to Elliptic’s researchers.
In its work last year, Elliptic found that in its first three years of operation, Huione Guarantee sellers moved about $11 billion on the platform. Less than a year later, researchers now estimate its cumulative total at $24 billion. The various extensions of this platform all contribute to the increase, but ultimately the escrow and transfer services are the core services.
“With Huione’s guarantee, the main thing being sold is actually laundering the proceeds of online fraud,” Robinson claims. “The vast majority of funds flowing through the marketplace are from vendors who openly offer money laundering services and talk about the types of fraudulent proceeds they are willing to accept.”
Meanwhile, with business booming, researchers say the platform’s owner, Huione Group, has tried to downplay its connection to the market and the connection between Huione Guarantee and other related services, such as Huione Pay. The market was even renamed “Haowang Guarantee”, although Huione Group confirmed to researchers that Huione Guarantee is still a “strategic partner and shareholder”.
Jason Tower, Myanmar Country Director at the US Institute of Peace, said: “The Huione Guarantee Group on Telegram continues to be widely used, with over 139,000 users. “Telegram groups are used to move large amounts of digital currencies at a significant discount. In comparison, competing platforms have lost significant numbers of users. “This is probably the result of the Chinese government’s repression.”
Robinson says Elliptic’s preliminary analysis shows that about $6 billion flows through a Telegram bot that it says is “primarily used for online gambling at Huione Guarantee.” The researchers’ analysis suggests that this may also be linked to money laundering. Users deposit crypto into a wallet and can then transfer their balance to individual mini-games within their Telegram groups. However, the “games” are very basic and don’t seem to involve any skill. Players also tend to bet consistently over very long periods of time, bet similar amounts, and space their bets closely. All this, Robinson claims, “combined to indicate automated gambling for the purposes of money laundering rather than entertainment.”
Despite Huione Guarantee’s apparent strategy for massive failure, Elliptic researchers say the platform isn’t entirely self-sustaining. So far, the stablecoin and cryptocurrency exchange Huione has not been able to register a significant volume of transactions, despite being advertised on its existing communication channels, Robinson says. As the market struggles to navigate this transition, its continued reliance on third parties could continue to be a weakness — at least for now.
“Huione’s guarantee is still dependent on the specific centralized infrastructure, Tether and Telegram,” says Robinson. “I think there’s an opportunity now to crack it down through the service providers. I think if we wait too long, there’s a chance they’ll go to their own infrastructure and that’s going to be more challenging.”
