The “largest online illicit market” is growing at an alarming rate, the report says

The addition of an internal communications service known as “ChatMe,” a cryptocurrency exchange (Huione Crypto), and a stablecoin backed by the US dollar (“USDH”) indicates that Huione Daman is looking to become a truly self-sufficient, full-service platform. Elliptic researchers say USDH describes it as “unrestricted” by regulators around the world and says it “avoids common freezing and transfer restrictions” that can be applied to other cryptocurrencies.

In its work last year, Elliptic found that in its first three years of operation, Huione secured sellers It moved to about $11 billion On the platform. Less than a year later, researchers now estimate the cumulative total to be $24 billion. The various expansions of the platform all contribute to this increase, but ultimately, escrow and transfer services are the core service.

“With the Huione guarantee, the main thing being sold is actually the laundering of the proceeds of Internet fraud,” Robinson claims. “The vast majority of money passing through the market is related to vendors who are openly offering money laundering services and who are vocal about the types of fraudulent proceeds they are willing to accept.”

Meanwhile, as business boomed, researchers say the platform’s owner, Huione Group, worked to reduce its connection to the market and the connection between Huione Daman and other associated services, such as Huione Pay. The market has even been renamed “Haowang Daman,” although Huione Group assured researchers that Huione Daman remains a “strategic partner and shareholder.”

“The Huione Assurance group on Telegram is still widely used, with more than 139,000 users,” says Jason Tower, country director for Myanmar at the United States Institute of Peace. “Telegram groups are used to transfer large amounts of cryptocurrencies at a significant discount. In comparison, competing platforms have lost a significant number of users. This is likely a result of Repression campaigns by the Chinese government.”

Robinson says preliminary analysis from Elliptic found about $6 billion passing through a Telegram bot that was allegedly “used primarily for online gambling under the Huione guarantee.” The researchers’ analysis suggests this may also be linked to money laundering. Users deposit cryptocurrencies into the wallet and can then transfer their balance to individual mini-games found in their Telegram groups. The “games” are very primitive, 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 periods of time between their bets. All of this “together points to automated gambling for money laundering purposes rather than entertainment,” Robinson claims.

Despite Huione’s apparent too-big-to-fail strategy, Elliptic researchers say the platform is far from completely self-sufficient. So far, the Huione stablecoin and cryptocurrency exchange has failed to record significant volumes of transactions, Robinson says, despite some promotion within existing communication channels. As the market drives transformation, its continued reliance on third parties may remain a weakness – at least for now.

“Huione collateral still relies on certain centralized infrastructure, like Tether and Telegram,” Robinson says. I think there is an opportunity now to suppress it through these providers. I think if we wait too long, there will be a chance they will move to their own infrastructure and that will become more difficult.