Cryptocurrency company Tether has frozen more than 29 million of its stablecoins allegedly linked to a huge Cambodian online marketplace servicing the so-called pig butchering scam.
Researchers at Elliptic last week pulled back the curtain on the Huione Guarantee, documenting how online marketplaces have become an important ecosystem for cybercriminal activity in Southeast Asia. Thousands of instant messaging channel sellers sell money laundering services, deepfake technology, stolen data, and even equipment like shackles to hold trafficked workers, and acts as guarantor for all transactions. Over a three-year period, researchers tracked $11 billion in transactions on platforms believed to be involved in fraud.
Most of these transactions are in the form of USDT (Tether). Tether is a stablecoin pegged to the US dollar that is increasingly attracting attention as a currency for cybercrime in Southeast Asia.
On Sunday, blockchain analytics firm Bitrace linked an address on the Tron platform whose funds had been frozen the previous day to the conglomerate Fuione Group, which owns Fuione Guarantee. The wallet contained 29.62 million USDT coins.
📢The 29.62 million USDT addresses that were frozen are those related to the guarantee business of Huione Group in Cambodia in the same month. (1/n)
Details 👇 https://t.co/s5AVUZD6sC pic.twitter.com/tzLyZa04m7
— Bitrace (@Bitrace_team) July 14, 2024
A Tether spokesperson confirmed to Record Future News that the company has frozen funds “related to activities that are allegedly fraudulent and related to cross-border criminal activity.”
“This action was initiated based on a direct request from law enforcement and underscores our commitment to cooperating with authorities around the world,” they said. According to Bitrace, immediately after the funds were frozen, Huione Group “reactivated a new business address” and transferred 114,800 USDC stablecoin from the original TRON wallet.
Earlier this year, a United Nations Office on Drugs and Crime report on cross-border crime in Southeast Asia identified USDT as “a top choice for cyber fraud activities and money laundering in the region due to its stability, ease of transactions, anonymity and low fees.” It’s a good option for both.” ”
Shortly after, Tether announced that it had “voluntarily” frozen $225 million worth of USDT “associated with an international human trafficking syndicate in Southeast Asia involved in the global ‘pig slaughter’ romance scam.”
In this scam, scammers typically establish relationships with victims on social media, dating sites, or messaging platforms to trick victims into making fraudulent investments. People who commit fraud are often trafficked by criminal groups and forced to scam victims around the world.
Elliptic’s investigation into Huione Group further reveals the scale of the cyber fraud industry in the region. This is often enabled by the ruling elite. A cousin of Cambodian Prime Minister Hun Manet serves on the board of payments and foreign exchange company Huione Pay, researchers said.
Reuters reported on Monday that the North Korean hacker group Lazarus transferred $150,000 from one of its digital wallets to Huione Pay between June 2023 and February 2024.
Blockchain analysts cited by Reuters said the funds were likely stolen last year from three crypto companies, including Atomic Wallet.
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