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The Chainalysis report claims crypto scammers are conducting shorter, more lucrative campaigns and highlighted the growth of CSAM and ‘pig butchering scams’ in certain marketplaces.
A new report on cybercrime has highlighted the growth of certain illicit activities and claims one site that facilitates this activity processed more than $49bn in cryptocurrency transactions since 2021.
The report by blockchain analysis company Chainalysis looked at the growth of various forms of illegal activity online, including a rise in child sexual abuse material (CSAM) in China-based networks. The report also said that crypto scammers are adapting their tactics and conducting shorter, but more lucrative and regenerative campaigns.
One particular type of scam that is becoming prevalent is “pig butchering”, a term used by criminals as they “fatten up” their victims to extract the most value possible. These scams involve building up a romantic relationship with the victim online before pushing them to send money into a fake investment opportunity.
“In a dark twist, the scammers on the other end of those conversations are often individuals that have been kidnapped, trafficked to south-east Asia, and forced to work in labour camps housed within large compounds to carry out pig butchering scams,” the report stated.
One particular site that facilitates crimes such as CSAM and pig butchering scams is Huione Guarantee, an online marketplace tied to the Cambodian conglomerate Huione Group.
Chainalysis said this site is a “significant player in facilitating cybercrimes” and that its size is far larger than previously reported. An earlier report from Elliptic claimed the merchants on Huione Guarantee made at least $11bn in transactions.
While Huione Group itself offers legitimate services, the Huione Guarantee site appears to be “heavily used for illicit crypto-based activities”.
“Huione Guarantee operates as a peer-to-peer (P2P) marketplace that connects buyers and sellers, typically by providing Telegram handles of the contact points, thus facilitating these transactions,” the report said. “Huione Guarantee claims to be a neutral party in these transactions; it reportedly operates like an exchange platform that takes a fee for every transaction executed, but does not verify the legitimacy of listed goods and services.”
The report referred to this site as a “nexus” for different kinds of cybercriminal actors and claims that many merchants on the site put “little effort” into hiding their criminal activities.
“While it may be the largest, it is not the only service of its kind. Other networks similarly harness Telegram to facilitate P2P transactions, often for the exchange of illicit goods and services.”
Last year, a report by Chainalysis claimed illicit cryptocurrency transactions rose for the second year in a row and reached $20.1bn in 2022.
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