Telegram crackdown shutters $35 Billion illicit crypto network

Telegram has dismantled Haowang Guarantee, reportedly the world’s largest illicit crypto marketplace. However,
stablecoins continue to be used in illegal activities.

Telegram recently blocked thousands of channels tied to Haowang Guarantee, which has reportedly laundered over $27 billion in transactions, primarily Tether (USDT). 

Haowang Guarantee has facilitated to Southeast Asian cybercriminals involved in crypto scams, personal data sales, and other illicit tech services, according to reports. 

Xinbi Guarantee, linked to money laundering and sex trafficking was also targeted in this crackdown. It is believed that together, the two platforms moved more than $35 billion in USDT. 

What might be the impact of this crackdown? 

According to Blockchain analytics firm Elliptic, the Telegram shutdown has disrupted operations of the platforms significantly. However it is speculated the two platforms may be seeking to reestablish themselves on Telegram. 

Meanwhile, despite this shutdown, according to experts, stablecoins still operate as accomplices to illegal financial activities, demonstrating the urgent need for tighter regulation. 

A spokesperson for a global financial crimes task force said,  “While this shutdown is a major disruption, it’s only a partial victory”. 

“Stablecoins are still being widely used to move illicit money across borders. That’s not going to change until the industry faces stronger oversight.”

In August 2024, Pavel Durov, co-founder of Telegram and the Russian social media platform VK, was arrested and indicted in France for complicity in drug trafficking and the distribution of child exploitation material. 

Durov’s arrest could increase scrutiny on Telegram’s role in enabling criminal enterprises in the digital space. Telegram is yet to issue a public statement on the ban.