Tether Freezes $28 Million in USDT Linked to Cambodian Fraudulent Activities

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Insidebitcoin2024/07/17 06:58

By:Insidebitcoin

Tether has taken action to freeze a Tron (TRX) wallet containing over 28 million USDT tokens, which are believed to be associated with criminal activities, including money laundering and fraud. This significant move was reported by an account dedicated to monitoring Tron and Ethereum (ETH) stablecoins, known as USDT/USDC Ban List, on July 13. The blacklisted address, identified as TNVaKW, held approximately $28.25 million in USDT.

Involvement of Huione Group

The wallet in question is suspected of being connected to the Cambodian company Huione Group. On July 14, blockchain security firm Bitrace revealed in a post on X that the frozen wallet, activated on July 9, was linked to Huione Group’s Guarantee business. This connection was established through detailed blockchain analysis.

Bitrace’s investigation indicated that Huione was attempting to circumvent the freeze by activating a new address, TQuFSv, and transferring $114,800 in USDC from the blacklisted TNVaKW wallet. Despite Tether’s intervention, Huione’s other business addresses, including its older address TL8TBp, remain active and operational.

Huione Guarantee’s Involvement in Southeast Asian Fraudulent Activities

On July 10, the crypto-tracing firm Elliptic reported Huione Guarantee’s involvement in fraudulent schemes , particularly pig-butchering scams. Elliptic’s analysis revealed that the online marketplace has become a major hub for scam operations in Southeast Asia, linked to criminal transactions amounting to at least $11 billion. Operating as a deposit and escrow service for peer-to-peer transactions on Telegram, primarily using Tether’s USDT stablecoin, Huione Guarantee has become a favored platform for scammers and money launderers.

Additionally, Elliptic alleged connections between Huione Guarantee and Cambodia’s ruling family, including Prime Minister Hun Manet. Further investigations indicated that a cousin of Prime Minister Hun Manet is a director of Huione Pay, a payments and foreign exchange business associated with Huione Group. Reuters also reported that the North Korean hacking group Lazarus transferred $150,000 from one of its digital wallets to Huione Pay between June 2023 and February 2024, with blockchain analysts suggesting these funds were likely stolen from three cryptocurrency companies last year, including Atomic Wallet.

The Growing Concern of USDT in Cybercrime

Earlier this year, a report by the United Nations Office on Drugs and Crime highlighted the prevalence of USDT in regional cyber fraud and money laundering operations. The report described USDT as the “preferred choice for regional cyber fraud operations and money launderers alike” due to its stability, anonymity, and low transaction fees.

In response to these concerns, Tether announced that it had “voluntarily” frozen USDT worth $225 million linked to an international human trafficking syndicate in Southeast Asia, responsible for global pig butchering romance scams. These scams typically involve fraudsters developing relationships with victims on social media, dating sites, or messaging platforms, and convincing them to make fraudulent investments. Often, the individuals carrying out these scams are trafficked into compounds by criminal groups and forced to con victims worldwide.

Law Enforcement and Analysts Respond

Following the report by Elliptic, law enforcement agencies and blockchain analysts have intensified efforts to disrupt Huione’s operations. They are actively tracking crypto transactions and identifying wallets linked to the platform. The freeze by Tether underscores these ongoing efforts to combat crypto-related fraud and the complex network of financial crimes facilitated by seemingly legitimate crypto platforms.

In conclusion, Tether’s action to freeze the wallet highlights the broader initiative to address financial crimes in the cryptocurrency space. The case of Huione Group demonstrates the intricate and pervasive nature of crypto fraud, necessitating vigilant monitoring and enforcement by both blockchain security firms and law enforcement agencies.

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