- Haowang Guarantee shut down after Telegram banned thousands of its channels
- Stablecoins can operate as accomplices to illegal financial activities
Telegram has taken measures to dismantle Haowang Guarantee, reportedly the world’s largest illicit crypto marketplace, but stablecoins continue to be used in illegal activities.
Telegram recently blocked thousands of channels tied to Haowang Guarantee, an online platform reportedly responsible for laundering over $27 billion in transactions, primarily in the stablecoin Tether (USDT).
Haowang Guarantee catered largely to Southeast Asian cybercriminals involved in crypto scams, personal data sales, and other illicit tech services, according to reports.
The crackdown also targeted Xinbi Guarantee, linked to money laundering and sex trafficking. 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.”
Interestingly, 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 potentially 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.
Furthermore, regulators globally could be seen intensifying pressure on crypto platforms to ensure stricter compliance standards to prevent the misuse of digital assets for crime.
