The addition of an internal communications service known as “ChatMe”, a cryptocurrency exchange (Huione Crypto) and a US dollar-backed stablecoin (“USDH”) suggests that Huione Garantie is seeking to become a truly complete and autonomous platform. . According to Elliptic researchers, the USDH website describes it as “unrestricted” by regulators around the world and claims that it “avoids common freeze and transfer restrictions” that can be applied to other cryptocurrencies.
In its work last year, Elliptic found that in the first three years of its operation, Huione Garantie sellers moved around $11 billion on the platform. Less than a year later, researchers now estimate that cumulative total at $24 billion. The platform’s various extensions all contribute to this increase, but ultimately its deposit and transfer services constitute the core service.
“With Huione Guarantee, the main thing being sold is actually laundering the proceeds of online scams,” says Robinson. “The vast majority of funds flowing through the market come from providers who openly offer money laundering services and talk about the types of fraud proceeds they are willing to accept.”
Meanwhile, while business is booming, researchers say the platform’s owner, Huione Group, has worked to downplay its association with the market and the connection between Huione Garantie and other related services, like Huione Pay. The market was even renamed “Haowang Garantie”, although the Huione group confirmed to researchers that Huione Garantie is still a “strategic partner and shareholder”.
“The Huione Garantie group on Telegram continues to be widely used, with more than 139,000 users,” says Jason Tower, country director for Myanmar at the American Institute of Peace. “Telegram groups are used to move large sums of cryptocurrencies at a discounted price. In comparison, competing platforms have lost significant numbers of users. This is probably the result of repressive measures by the Chinese government.
Robinson claims that an initial analysis by Elliptic found that approximately $6 billion was flowing through a Telegram bot that would be “used primarily for online gaming on Huione Garantie.” The researchers’ analysis suggests this could also be linked to money laundering. Users deposit cryptocurrencies into a wallet and then can move their balance to individual mini-games that exist in their own Telegram groups. The “games” however are extremely rudimentary and don’t seem to involve any skill. Players also tend to bet consistently over very long periods of time, betting similar amounts and leaving specific intervals between their bets. All of this “together suggests automated gaming for the purposes of money laundering rather than entertainment,” Robinson says.
Despite Huione Garantie’s apparent too-big-to-fail strategy, Elliptic researchers say the platform is far from completely self-sufficient. So far, Huione’s stablecoin and cryptocurrency exchange has failed to see significant trading volumes, Robinson said, despite some promotion within its existing communications channels. As the market works to facilitate the transition, its continued reliance on third parties could still be a weakness, at least for now.
“Huione Garantie still depends on some centralized infrastructure, Tether and Telegram,” explains Robinson. “I think there is now an opportunity to remove it through these service providers. I think if we wait too long there is a chance they will migrate to their own infrastructure and it becomes more difficult.
