Crooks orchestrate multibillion crypto fraud schemes, torture 'dogs' with electric batons

Two fresh cases have emerged involving bitcoin (BTC) and crypto-related crimes. They’re linked to Cambodia and Malaysia and involve sums that amount to billions of USD.

First, blockchain analysis company Elliptic claims that Huione Guarantee, a three-year-old Chinese-language ecosystem and marketplace, facilitated transactions worth at least $11 billion.

According to researchers, the main payment instrument in this marketplace is tether (USDT), the most popular stablecoin, and most transactions target cyber scam operators. For example, it involves the creation of scam crypto websites intended for "pig butchering" scams, which lure victims into depositing crypto assets that are then stolen.

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According to Elliptic, this platform also provides scammers with data, including contact details, telecom equipment, and "AI face-changing" software, to target and communicate with victims. Additionally, merchants on the platform offer money laundering services.

Value cryptocurrency wallets — Value of USDT received by cryptocurrency wallets known to be used by Huione Guarantee and its merchants. These figures should be considered as lower bounds of the true volume of transactions on the platform

"The total figure [$11 billion] is likely to be higher as there is significant turnover of merchants, and information on their cryptocurrency wallets is not always available," Elliptic said, noting that not all of these transactions can be linked to fraud or other illicit activity.

Also, according to the research, the value of stablecoin received by the platform and its merchants suggests that it is “a key enabler of cyber scam operators in Southeast Asia.”

Scam Organizers — Huione Guarantee merchants offering web development of cryptocurrency investment sites of the type used in pig butchering scams (left), personal data of individuals around the world for targeting by scammers (middle) and AI face changing software advertised for use in scams (right).

The researchers claim that Huione Guarantee has indirect ties to the family of the current Cambodian prime minister, Hun Manet, as his cousin Hun To is the director of Huione Pay, operated by the same Cambodian conglomerate, Huione Group.

What is more, scam operators run scam compounds where they imprison and torture “workers”.

“Our researchers identified advertisements for tear gas, electric batons and electronic shackles that give an electric shock if the wearer leaves a predetermined area. The merchants refer to “preventing escapers” and controlling “runaway dogs”. Those working within the scam compounds are commonly referred to as “dogs” or “dog pushers,” Elliptic said in a blog post.

East Asia scams — Advertisements on Huione Guarantee for electric shock shackles (left) and electric batons (right), which the merchants suggest are to be used on scam compound workers

Meanwhile, in Malaysia, Deputy Energy Transition and Water Transformation Minister Akmal Nasrullah Mohd Nasir stated that bitcoin miners have stolen $725 million worth of electricity since 2018, as reported by Malay Mail.

The report mentions that energy supply companies have various methods to detect unusual energy consumption, and combating illegal mining is a top priority for the ministry.

The state also seized 2,022 BTC mining machines in October 2022.