Regulation
A company linked to Cambodia’s ruling family is running an $11 billion crypto scam operation – DL News
- Huione Guarantee operates an online marketplace for cryptocurrency scam software and money laundering services, Elliptic says.
- According to company documents, Hun To, the nephew of Cambodia’s prime minister, is a director of one of Huione’s units.
- According to authorities, organized criminal groups are coercing thousands of people into cryptocurrency scams.
The Cambodian government has said it wants to put an end to the rampant wave of cryptocurrency scams and close down the country’s online fraud centers.
But evidence has emerged implicating the prime minister’s family in cryptocurrency scams.
This according to a DL News investigation and new relationship from blockchain analytics firm Elliptic, which found that a Cambodian online marketplace called Huione Guarantee has become widely used by scam operators in Southeast Asia.
According to Elliptic’s analysis, crypto wallets used by Huione Guarantee and merchants operating on the site have received more than $11 billion since 2021.
A DL News An analysis of the Huione Guarantee website found that merchants were openly offering money laundering services, while others were selling software and web development tools to run scams to defraud victims, called “pig slaughter” scams.
Cousin of the Prime Minister
Hun To, a cousin of Prime Minister Hun Manet, is a director of one of the units that make up the Cambodian conglomerate Huione Group, which has been linked to a cryptocurrency fraud, Elliptic said.
While not all of the $11 billion in transactions cited by Elliptic can be traced back to illegal transactions, researchers said the evidence provides “very strong indications” that the majority of payments were derived from illicit activity.
“Many merchants explicitly offer money laundering services,” Elliptic said, “including accepting payments from victims around the world, transferring them across borders, and converting them into other assets including cash, stablecoins, and Chinese payment apps.”
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Huione media representatives did not respond to a request for comment. Hun To could not be reached for comment.
Industrial scale proportions
The development is the latest sign that cryptocurrency fraud has reached industrial-scale proportions in Southeast Asia.
In January, the United Nations Office on Drugs and Crime said that more than $17 billion in USDTthe stablecoin issued by Tether, was linked to underground cryptocurrency exchanges, illegal trading and criminal activity.
DL News reported how criminal groups are operating facilities in special economic zones in Cambodia and Myanmar where thousands of people are forced to commit cryptographic fraud on the Internet.
The advent of online marketplaces that brazenly offer illicit services takes cryptocurrency fraud to a new level.
Huione Guarantee acts as a sort of clearinghouse for thousands of Chinese-language instant messaging app channels, each of which is operated by a different merchant.
Elliptic said in its report that the company operates the platform and acts as a guarantor or escrow service provider for all transactions, ostensibly to prevent fraud.
The site states that payments are accepted primarily in USDT, but payment apps and bank transfers can also be used.
Anti-money laundering courtyards
Browsing through its groups, DL News I found an ad on a Telegram channel looking for truck fleets.
Typically, this is code for money laundering. “parades” which seek to obscure the origin of illicit transactions by passing them through different accounts. The entity behind the announcement said it is seeking to deposit 1,500 to 50,000 USDT per day.
“No registration required, cryptocurrency exchange is completed in 1 minute, no custody of funds is required, security, privacy and reliability support U-to-anonymous currency exchange, cross-chain exchange,” the announcement says.
In January, Slowmist, a blockchain analytics firm, also identified Huione acts as a middleman to collect ransoms from the families of people forced to work in fraudulent compounds by the Northern Myanmar Alliance Army.
Luxury services
Huione started in 2014 as a company that provided luxury services to wealthy Chinese and Cambodians, including helicopter leasing and five-star hotel bookings, according to its website. It wasn’t long before it started a payment app venture called Huione Pay.
The company and its various subsidiaries have become a fixture in Cambodia’s financial sector. From the outside, Huione Pay’s Phnom Penh headquarters looks like just another bank in the financial district.
Two giant black and gold panda statues flank the entrance. And like most official buildings in the city, there are signs on the walls saying that weapons are not allowed inside.
Fraudulent compounds
Hun To, a cousin of Cambodia’s prime minister, is director of one of the payments units linked to Huione Guarantee, according to company documents reviewed by DL News.
He is also the chairman of the board of another related company, Huione Life Insurance.
Hun To’s late father is the brother of Cambodia’s former dictator Hun Sen, who stepped down in 2023 in favor of his son Hun Manet.
Callan Quinn, DL News Hong Kong correspondent covering the cryptocurrency industry in Asia. Got a tip? Contact the author at callan@dlnews.com.