Crypto Networks Thriving Amid Sanctions and Shutdowns
The cryptocurrency ecosystem is witnessing a troubling trend involving online gambling platforms linked to sanctioned guarantee networks that have managed to process over 414 million USDT in revenue within a short span of less than two months. This development underscores the resilience and adaptability of such operations even after significant law enforcement crackdowns on their payment providers. Recent data from Bitrace, a blockchain intelligence analyst, reveals how these illicit activities continue unabated, primarily using Telegram-based wallets and crypto exchanges to facilitate massive transactions.
Main Actors: Huione, Wangbo, and HWZF Wallets
Bitrace’s investigation highlights a trio of crypto wallets—Huione Telegram Wallet, Wangbo Wallet, and HWZF (associated with Huionepay and Overseaspay)—at the heart of these operations, serving as primary settlement tools for gambling networks. Initially intended to support transactions for goods and services via Telegram guarantee markets, these wallets have evolved into conduits for illegal operations, including scams and extensive money laundering.
Operational Mechanics Post-Huione Shutdowns
Despite the shutdown of platforms like Huionepay and Tudou Guarantee, gambling entities continue to thrive. Bitrace exposes how these platforms, functioning as escrow-style marketplaces via Telegram, have enabled gambling sites to connect with third-party crypto payment providers using Telegram’s mini apps. This setup facilitates fund deposits and withdrawals without the need to directly interact with major exchanges, thus maintaining the operators’ anonymity and reducing exposure.
Financial Movement: Risking Compliance
The intelligence gathered by Bitrace shows that even after multiple warnings from payment providers, around 9 million USDT has been traced flowing directly into well-known exchanges like Binance, OKX, and HTX in a span of just 53 days. These transactions highlight a critical compliance vulnerability, as the continuous movement of these funds may trigger compliance reviews and pose regulatory challenges for the related exchanges.
The Persistent Pipeline Between Telegram Markets and Crypto Exchanges
Over the past years, the Huione Group has been at the center of scrutiny and legal actions. Identified by U.S. authorities as a significant money laundering entity, the Huione Guarantee, despite its shutdown in 2025, paved the way for successors like Tudou Guarantee to continue their operations. Data from investigations by Elliptic and the International Consortium of Investigative Journalists (ICIJ) indicate that these networks continue to support financial crime, leveraging USDT for settlements that flow through mainstream exchanges.
Evolving Strategies: From Huione to Tudou
Following the dismantling of the Huione network, vendors quickly transitioned to Tudou Guarantee, which absorbed much of the prior activity. The transition signifies the adaptive tactics used by these illicit operations to sustain their revenue stream and maintain operational secrecy. Moreover, the shared infrastructure and branding among Telegram-based tools enable these networks to persist, undisturbed by external pressures.
Continued Challenges for Regulators and Exchanges
One of the critical challenges has been the seamless flow of funds through these networks, pointing to significant gaps in marketplace cessation efforts, wallet service providers’ responsibilities, and the enforcement of exchange-level policies. As these entities continue to evolve and adapt, the effectiveness of compliance frameworks remains in question, prompting an urgent need for comprehensive regulatory measures.
Conclusion: The Unyielding Revenue Streams of Gambling Syndicates
The dynamics of cryptocurrency-supported gambling operations present a formidable challenge to the integrity of the financial system. Despite enforcement and shutdowns, these networks reveal the broader industry’s potential for misuse. The resilience of such operations amidst legal and financial scrutiny demonstrates a pressing need for enhanced monitoring, technological interventions, and regulatory frameworks that can help mitigate these underground activities. With Bitrace’s insights, the path forward arguably lies in proactive cross-industry collaboration to dismantle these complex networks and protect the cryptocurrency ecosystem’s potential for legitimate innovation.