Summary
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- FinCEN's sanctions against Huione Group are an important law enforcement milestone. However, the extensive Chinese-language escrow service ecosystem is still active.
- Escrow platforms are functionally redundant. Vendors and brokers are operating across multiple services. Therefore, a split or rebranding is likely rather than a complete shutdown of Huione Group.
- Telegram plays a core role in fraud infrastructure, providing anonymity and low barriers to entry.
On May 1, 2025, the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department issued a Notice of Proposed Rulemaking (NPRM) under Section 311 of the USA PATRIOT Act, designating the Cambodia-based Huione Group as a "primary money laundering concern". This notice proposes blocking Huione Group's access to the U.S. financial system, significantly enhancing efforts to dismantle illegal financial infrastructure, and is set to take effect in early June.
FinCEN states that Huione Group facilitated the laundering of at least $4 billion in illegal funds from 2021 to January 2025. These funds are associated with various illegal activities:
- Romance Scams (Pig Butchering) (highly organized crypto asset romance scams)
- Large-scale cyber robberies by North Korea's Lazarus Group
- Activities by international criminal organizations operating across Southeast Asia
Huione Group's subsidiaries, including Huione Pay, Huione Crypto, and Huione Guarantee, have operated without implementing substantial AML or KYC controls while enabling massive cross-border transactions.
Unfortunately, while Huione Group is the most significant escrow service, it is not the only one in a much broader network, many of which continue to operate openly. These platforms serving Chinese-speaking users function as unofficial escrow services and play a crucial role in money laundering proceeds from crypto assets and fiat currency crimes.
This blog will examine the changes in the situation after Huione Group's disruption, investigate other websites and Telegram-based escrow marketplaces, and consider the implications of FinCEN's recent actions for the future of compliance and enforcement.
General Mechanism of Escrow Services
... [rest of the text continues]Huione announced its closure and removed its name from the headquarters, but it is still too early to determine whether this is a true withdrawal or simply the beginning of a quiet brand change. Huione Group has so far taken measures to ensure the future of its business, such as providing transactions with USDH, which claims to be non-freezable, and acquiring 30% of Tudou Guarantee's shares in December 2024.
At present, the closure of Huione Group may result in some traffic movement, confusion in broker relationships, and increased short-term vigilance, but unfortunately, the structural factors of crypto asset crimes still remain.
Implications for Compliance and Enforcement
The disruption of Huione Group highlights that illegal financial activities are increasingly enabled by infrastructure, not just individual entities. As these services move between platforms and become more decentralized, law enforcement must also evolve. Regarding the ecosystem that facilitates fraud, merely closing traditional platforms is no longer sufficient. Risk monitoring must focus on the possibility of brand name changes, mimicking existing escrow services, repeated collaboration through Telegram aliases in off-chain activities, and identifying on-chain flows that bridge to similar P2P activities.
FinCEN's proposal to designate Huione Group as a primary money laundering concern clearly shows an expansion of regulatory efforts against the ecosystem that facilitates fraud. We commend FinCEN's efforts and encourage further actions against crypto asset crime enablers. We are also monitoring on-chain and off-chain behaviors and patterns that indicate Huione Group's rebranding or successor companies.
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