US Treasury Targets Huione Group for Laundering Billions in Crypto Funds

Highlights:

• FinCEN plans to block Huione Group from using the US financial system due to links with cybercrime networks.
• Huione Group processed over $4 billion in suspicious funds from scams and North Korean cyberattacks.
• Cambodia revoked Huione Pay’s license, and Google removed Haowang Guarantee after reports of illegal activity.

The Financial Crimes Enforcement Network (FinCEN), a bureau within the United States Department of the Treasury, proposed on May 1 to block Huione Group from the American banking system. The move would stop U.S. financial institutions from opening or maintaining accounts for Huione Group or its subsidiaries.

US targets Huione Group in $4B laundering crackdown. Feds named Huione Group, alleging a $4 billion crypto laundering network tied to North Korea. The pressure intensifies. This crackdown exposes the deep reach of illicit finance in crypto. Regulators are closing the net,… pic.twitter.com/YnyoDoZgKe

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FinCEN labeled Huione Group a key player in helping cybercriminals launder stolen funds. The group is accused of supporting actors like North Korea’s Lazarus Group and Southeast Asian crime rings. These groups reportedly stole billions of dollars through online scams and moved the proceeds using Huione’s services.

Scott Bessent, the secretary to the Treasury, stated:

“Huione Group has established itself as the marketplace of choice for malicious cyber actors like the DPRK and criminal syndicates, who have stolen billions of dollars from everyday Americans. Today’s proposed action will sever Huione Group’s access to correspondent banking, degrading these groups’ ability to launder their ill-gotten gains.”

The action taken by the Treasury Secretary bases its action on the Patriot Act. In this section, the Treasury can target entities that it believes to be a primary money laundering concern. The proposal is open for comment after it is officially published on the register.

Huione does not hold bank accounts in the country. However, it uses the accounts of foreign firms that hold accounts in the United States. Huione allegedly moves funds globally without being subjected to U.S. direct oversight using the accounts of its affiliate institutions.

Huione and Links to North Korea

According to the bureau’s investigation, Huione processed over $4 billion in suspicious transactions from August 2021 to January this year. North Korea’s cyber activity accounts for $37 million of the suspicious transactions. Online crypto scams accounted for another $36 million. Meanwhile, other fraud schemes brought in nearly $300 million.

Investigators say that Huione Group operates through several businesses with separate roles in the laundering process. These include Huione Pay, a fiat payment service, Huione Crypto, which handles virtual assets, and Haowang Guarantee, a platform offering illegal services.

FinCEN also found that Huione issued its own U.S. dollar-pegged stablecoin, called USDH. In particular, criminals use this digital currency to move funds across platforms. Since it cannot be frozen, USDH allows users to convert crypto into fiat without detection.

The agency accused Huione of failing to put in place proper systems to detect or report suspicious transactions. Moreover, it found no strong anti-money laundering measures or identity checks for users. In one case, Huione received funds tied to a North Korean cyberattack, yet it did not flag the transaction.

Cambodia’s Response and Recent Platform Removals

Cambodia, through its central bank, recently canceled the license of Huione Pay. The central bank said payment firms in the country are not allowed to trade or deal in digital assets. During the same month, Google removed the Telegram-based Haowang Guarantee app. The decision followed a report by blockchain analytics firm Elliptic, which linked the platform to illegal activity. Tether also froze $29.92 million USDT linked to the group.

These moves came before FinCEN’s proposal and reflected growing concerns over Huione’s involvement in global money laundering efforts. The U.S. Treasury aims to disconnect Huione from banking partners that depend on access to American financial networks.