Group Implicated in Laundering $4 Billion in Illegal Funds
The US Financial Crimes Enforcement Network (FinCEN) has initiated unprecedented measures against Cambodian conglomerate Huione Group, planning to completely cut it off from the US banking system. According to the agency’s official statement, the company is accused of large-scale facilitation of criminal proceeds laundering and cryptocurrency fraud, with a total volume of illegal operations amounting to at least $4 billion between August 2021 and January 2025. The regulator is particularly concerned about the USDH dollar stablecoin, which authorities believe creates “a virtually risk-free ecosystem for conducting illegal operations.”
Extensive Network with Multi-Billion Dollar Turnover of Illegal Funds
FinCEN has identified that over recent years, Huione Group has created an extensive network of companies focused on various aspects of financial services and cryptocurrency operations. This network includes the payment service Huione Pay, the cryptocurrency platform Huione Crypto, and the online marketplace Haowang Guarantee (formerly known as Huione Guarantee). According to the regulator, the latter is actively used for trading illegal goods and services, essentially functioning as a darknet marketplace but with a more user-friendly interface and expanded capabilities.
Of particular concern are Huione Group’s connections to the North Korean hacker group Lazarus, known for its cyberattacks on cryptocurrency exchanges and other financial institutions. Cybersecurity experts have repeatedly linked Lazarus to the North Korean government, which may indicate the use of funds laundered through Huione to bypass international sanctions.
“The scale of Huione Group’s operations goes far beyond ordinary cryptocurrency fraud,” notes Alexander Peterson, a financial security expert. “We’re seeing a systematic approach to creating money laundering infrastructure that includes all the necessary elements: from initial collection of funds to their legalization through various jurisdictions.”
According to analytics firm Elliptic, over the past year, the total amount of transactions through Huione services reached $24 billion, making it the world’s largest illegal online platform. Researchers note that the monthly turnover of funds increased by 51%, indicating the growing popularity of the group’s services among criminal communities.
USDH Stablecoin as a Key Money Laundering Tool
Central to Huione Group’s schemes is their proprietary stablecoin USDH, which, according to FinCEN, “provides Huione Group clients with a virtually risk-free ecosystem for conducting illegal operations.” The stablecoin is used by criminals to move and store funds without risk of law enforcement intervention.
Unlike regulated stablecoins such as USDC or USDT, USDH is characterized by an extremely opaque structure of collateral and governance. Experts note that although USDH is officially positioned as a stablecoin backed by the US dollar, there is effectively no independent audit of its reserves.
“Stablecoins have become an ideal tool for criminals because they combine the stability of fiat currencies with the anonymity and cross-border nature of cryptocurrencies,” explains Maria Roberts, a crypto analyst and blockchain security consultant. “USDH has gone further than most other stablecoins, creating a closed ecosystem that minimizes interaction with regulated financial institutions.”
Of particular danger, according to the regulator, is the integration of USDH into various services of the group, which allows for the seamless movement of funds between the payment system, cryptocurrency platform, and online marketplace. This significantly complicates tracking the origin of funds and identifying the ultimate beneficiaries of illegal operations.
Sanctions Consequences and International Context
The measures proposed by FinCEN include prohibiting US financial institutions from opening or maintaining correspondent accounts for Huione Group and related organizations. This will effectively cut the company off from access to dollar liquidity and significantly limit its ability to conduct international operations.
“Even companies registered in jurisdictions like Cambodia critically depend on access to the American financial system for international settlements,” comments Jonathan Harris, an international finance specialist. “Blocking correspondent accounts is essentially a death sentence for any financial organization with global ambitions.”
FinCEN’s actions against Huione Group fit into the broader context of increased regulation of the cryptocurrency sector in the US and other developed countries. In recent years, regulators have been increasingly identifying and blocking illegal cryptocurrency platforms, especially those associated with money laundering, terrorism financing, or sanctions circumvention.
Experts note that while US sanctions can significantly limit Huione Group’s capabilities, completely blocking their activities will require coordinated action by regulators in various jurisdictions. “Cryptocurrency business is inherently cross-border and can easily move between jurisdictions,” emphasizes Emily Chen, an expert in international financial law. “To effectively counter structures like Huione, global coordination of efforts to regulate the cryptocurrency sector is necessary.”
At the same time, it is expected that US actions may prompt other countries to take similar measures against Huione Group, which could lead to the company’s global isolation from the regulated financial system. This, in turn, could significantly hamper its operations and reduce the attractiveness of its services to potential clients.