Tether Freezes $29M in Cryptocurrency Linked to Cambodian Market Accused of Fueling Scams

Cryptocurrency firm Tether has frozen more than 29 million of its stablecoins, allegedly linked to a massive Cambodian online marketplace offering services for so-called pig slaughter scams.

Elliptic researchers last week pulled back the curtain on Huione warrantywhich documents how the online marketplace has become a critical ecosystem for cybercriminal operations in Southeast Asia. Merchants across thousands of instant messaging channels sell money laundering services, deepfake technology, stolen data, and also equipment such as chains to restrain trafficked workerswith Huione acting as a guarantor for all transactions. Over three years, researchers have tracked $11 billion in transactions on the platform that they believe are linked to scams.

Most of these transactions are in the form of USDT, or Tether, a stablecoin pegged to the U.S. dollar that is increasingly being identified as the cybercrime currency of choice in Southeast Asia.

On Sunday, blockchain analytics firm Bitrace linked an address on the TRON platform that had its funds frozen the day before to Huione Group, the conglomerate that owns Huione Guarantee. The wallet contained 29.62 million USDT coins.

A Tether spokesperson confirmed to Recorded Future News that the company had frozen the funds, which were “associated with activities allegedly linked to fraudulent and transnational criminal operations.”

“This action was initiated based on a direct request from law enforcement, underscoring our commitment to cooperate with authorities around the world,” they said. According to Bitrace, shortly after the funds were frozen, Huione Group “re-activated a new business address” and transferred 114,800 USDC stablecoins from the original TRON wallet.

Earlier this year, a United Nations Office on Drugs and Crime Transnational Crime in Southeast Asia Report called USDT the “preferred choice for regional cyber fraud operations and money launderers, due to its stability and the ease, anonymity and low fees of its transactions.”

Immediately after, Tether announced had “voluntarily” frozen $225 million worth of USDT “linked to an international human trafficking syndicate in Southeast Asia responsible for a global ‘pig slaughter’ romance scam.”

The scams typically involve a scammer establishing a relationship with a victim on social media, dating sites, or messaging platforms and tricking them into making fraudulent investments. Often, the people who carry out the scams have been trafficked into complexes by criminal groups, where they are forced to defraud victims around the world.

Elliptic’s research on Huione Group has further exposed the industrial scale of cyber fraud in the regionwhich is often enabled by the ruling elite. According to researchers, a cousin of Cambodian Prime Minister Hun Manet is a director of Huione Pay, a payments and currency exchange company.

On Monday, Reuters reported that North Korean hacker group Lazarus sent $150,000 from one of its digital wallets to Huione Pay between June 2023 and February 2024.

According to blockchain analysts cited by Reuters, the funds were likely stolen from three cryptocurrency companies last year, including Atomic Wallet.

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