In July 2024, over $35 million from the infamous $305 million DMM Bitcoin hack has been laundered through the online marketplace Huione Guarantee.

Suspicions point to the Lazarus Group, known for sophisticated laundering techniques and off-chain indicators linked to similar cyberattacks.

Tether’s Response and Laundering Path

Over the weekend, Tether took action by blacklisting a wallet on Tron containing 29.6 million USDT, suspected to be connected to Huione. This wallet received approximately $14 million within a three-day period directly from the DMM Bitcoin hack.

The laundering process from funds stolen in the DMM Bitcoin hack to Huione can be outlined as follows:

1. Deposit to Mixer: Stolen BTC is first deposited into a mixer to obscure its origin.
2. Withdrawal from Mixer: BTC is then withdrawn from the mixer.
3. Bridging via THORChain: Funds are bridged from Bitcoin to other blockchains like Ethereum or Avalanche using services like THORChain or Threshold Avalanche bridge.
4. Conversion to USDT:

The laundered BTC is swapped for USDT, often via platforms like SWFT.
5. Transfer to Huione: Finally, USDT is transferred to Huione, where it is used for various transactions.

Huione’s Role and Allegations

Huione has emerged as a significant hub for illicit funds in Southeast Asia, notably favored by criminal groups such as pig butchering gangs. According to a report by blockchain analytics firm Elliptic, merchants on Huione have conducted over $11 billion in transactions, raising concerns about its ties to criminal activities.

Allegations also suggest connections between Huione Group and the Cambodian government, with past incidents like funds from the $31 million Fintoch investment fraud scheme being traced to the marketplace.

The developments underscore the challenges in regulating online marketplaces involved in illicit financial activities, prompting heightened scrutiny from authorities and blockchain analytics firms alike. As investigations continue, stakeholders are vigilant about tracing and mitigating the flow of laundered funds through such platforms.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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