Scams that prey on investors evolve as fast as the crypto world expands. One of the most insidious ones, known as "pig butchering," has become a billion-dollar industry, exploiting individuals under the guise of promising investment returns.
A detailed report exposes how these scams thrive through platforms like Huione Guarantee, linked to Cambodia's ruling elites. The present article presents the ins and outs of the fraud and the parts that may be involved. Read on to better understand how it works!
The Role Of Huione Guarantee
Huione Guarantee is a deposit and escrow service that facilitates peer-to-peer transactions using Tether, a popular cryptocurrency. It operates via the Telegram messaging app, ensuring transactions go smoothly without internal fraud. However, beneath this legitimate facade, it serves as a haven for scam operations.
To give you an idea of the scale of operations, Huione Guarantee has processed $11 billion in transactions since its inception, with $3.4 billion occurring this year alone. The bulk of these transactions are tied to pig butchering scams.
The Anatomy Of The Scam
According to Tom Robinson, co-founder and chief scientist at Elliptic, Huione Guarantee is primarily a marketplace for scammers. The platform supports the entire scam lifecycle—right from targeting potential victims to laundering stolen funds.
Huione Guarantee's tools and tactics offerings cover the entire scam ecosystem, including GPS tracking shackles and electric batons that are used to control human trafficking victims forced to work in scam operations and fake investment websites and deepfake technology to deceive targets. Plus, they use money laundering services to hide the origins of stolen Tether, making the transactions untraceable.
The scale of these scams is growing because scammers can now outsource critical functions, such as:
- acquiring victim data;
- building infrastructure; and
- laundering money.
But not everything in this treacherous scam is cyber-centered; there are significant human costs involved. Continue reading to know more about them.
The Human Cost
Victims are coerced into buying cryptocurrencies and transferring them to scammers. Meanwhile, the scammers often operate under duress, trapped in forced labor camps across Southeast Asia, including Myanmar, the Philippines, and Cambodia.
According to an FBI report, alarming statistics show that crypto-investment fraud losses in the U.S. amounted to nearly $4 billion in 2023 alone. The total scam revenue reveals that pig butchering scams amassed around $75 billion from 2020 to early 2023.
Ties To Cambodian Elites
Huione Guarantee is run by Huione Group, a Cambodian financial conglomerate linked to Prime Minister Hun Manet's family. One of the company's directors is Hun To, the prime minister's cousin, who is connected to an alleged scam compound owned by Heng He, a conglomerate owned by two Chinese nationals.
Wider Implications
Experts note that much of the pig butchering ecosystem ties back to Chinese organized crime. These operations are often run from hotels and resorts in Cambodia, which experienced declining tourism during the COVID-19 pandemic.
Laborers in these operations often face severe conditions, including having their passports confiscated and physical punishment like electrical shocks for not following rules. Robinson from Elliptic sees an opportunity to disrupt this criminal ecosystem by imposing international sanctions on Huione's leadership, advocating that it could significantly hinder the marketplace's operations.
