The addition of an internal messaging service known as “ChatMe”, a cryptocurrency exchange (Huione Crypto), and a US dollar-backed stablecoin (“USDH”) suggests that Huione Guarantee wants to become a self-sustaining, full-service platform. The USDH website, Elliptic researchers say, describes the currency as “unrestricted” by regulators around the world and says it “bypasses common freeze and transfer restrictions” that can be applied to other cryptocurrencies.
In its work last year, Elliptic found that Huione Gwarancja sellers moved about $11 billion on the platform in its first three years of operation. Less than a year later, scientists estimate the total to be $24 billion. All platform extensions contribute to growth, but ultimately deposit and transfer services are the core service.
“Through Huione Guarantee is sold primarily to launder the proceeds of online fraud,” claims Robinson. “The vast majority of funds passing through the market are from providers who openly offer money laundering services and who talk about the types of fraud proceeds they are willing to accept.”
Meanwhile, researchers say that as business boomed, the platform’s owner, Huione Group, sought to downplay its connection to the marketplace and the link between Huione Guarantee and other related services such as Huione Pay. The marketplace was even renamed “Haowang Guarantee”, although the Huione Group confirmed to researchers that Huione Guarantee is still a “strategic partner and shareholder”.
“The Huione Guarantee Group on Telegram continues to be widely used, with over 139,000 users,” says Jason Tower, country director for Myanmar at the U.S. Institute of Peace. “Telegram groups are used to transfer large sums of cryptocurrencies at a significant discount. In comparison, competing platforms have lost a significant number of users. This is probably an effect repression by the Chinese government.”
Robinson claims that preliminary analysis by Elliptic showed that approximately $6 billion passed through a single Telegram bot that is allegedly “used primarily for online gambling under the Huione Guarantee.” Researchers’ analysis suggests it may be allegedly related to money laundering. Users deposit cryptocurrencies into the wallet and can then transfer their balance to individual mini-games that exist in their own Telegram groups. However, the “games” are extremely straightforward and seem to require no skill. Players also tend to place bets consistently over very long periods of time, bet similar amounts, and leave precise intervals between bets. All this “together suggests automated gambling intended for money laundering rather than entertainment,” Robinson says.
Despite Huione Guarantee’s apparent too-big-to-fail strategy, Elliptic researchers say the platform is not completely self-sustaining. So far, stablecoin and cryptocurrency exchange Huione has not registered significant transaction volumes, Robinson says, despite some promotion on existing communication channels. As the market seeks to accelerate this transformation, its continued reliance on third parties may continue to be a weakness – at least for now.
“The Huione guarantee is still dependent on some centralized infrastructure, Tether and Telegram,” says Robinson. “I think there is an opportunity now to suppress this through these service providers. “I think if we wait too long, there’s a chance they’ll move to their own infrastructure and that will become more of a challenge.”