Telegram Bans $35B Scam Networks Amid U.S. Treasury Action

Telegram has banned $35 billion in scam marketplaces, linked to Huione Group, following a U.S. Treasury FinCEN order.

The ban highlights ongoing challenges in regulating deceptive crypto activities, as fraudsters swiftly adapt to evade enforcement.

Telegram Blocks $35 Billion in Scams After Treasury Action

Telegram banned scam marketplaces valued at $35 billion, primarily involving Huione Guarantee and Xinbi Guarantee. This action was prompted by a U.S. Treasury FinCEN order, forcing a shift in fraudulent activities.

Key players include the Cambodia-based Huione Group. They operated under the label of primary money laundering concern. Rapid emergence of over 30 imitator services was seen leveraging alternative platforms.

Fraud Networks Adapt Fast, Find New Platforms

The ban disrupted major scam operations, impacting liquidity flows and trading volumes. Despite the crackdown, fraud networks adapted quickly, resuming activities on new platforms.

Financial repercussions are significant, with Huione’s transaction volume shifting to platforms like Tudou Guarantee. This challenges regulatory frameworks seeking to curb crypto-based fraud.

Crypto Fraud Persistence Analyzed by Experts

History shows similar enforcement actions such as Silk Road leading to Hydra, illustrating a recurrent “whack-a-mole” pattern in crypto fraud. Redirection of scams onto new platforms post-crackdown is reinforcing this trend.

Expert analysis suggests continued evasion of regulations by using alternative cryptocurrencies and platforms. The persistence of these fraud networks poses an ongoing regulatory challenge, according to industry analytics. Elliptic, Blockchain Intelligence Firm stated, “At least $4 billion in illicit proceeds directly tracked to Huione-related flows.”