New darknet marketplaces are dominating activity on Telegram despite shutting down Huione Guarantee

The shutdown of the illicit marketplace, Huione Guarantee, has allowed smaller darknet platforms to surface and thrive on Telegram. Blockchain analytics firm Elliptic disclosed this in a recent report, noting the growth of bad actors on the social messaging app.

According to the report, over 30 guarantee marketplaces have surfaced on Telegram, offering bad actors a platform for accessing services and goods, such as scamming and money laundering tools. Huione Guarantee was once famous for facilitating such transactions.

However, Telegram shut down Huione Guarantee on May 13, based on earlier research from Elliptic, which identified that bad actors had used the platform to facilitate over $27 billion worth of transactions.

The shutdown, which affected thousands of channels and usernames connected to the mega marketplace, effectively crippled its activity, forcing it to initially offer escrow services for private transactions for a few weeks before eventually shutting down fully.

Nevertheless, its collapse has only opened room for other Chinese-language online marketplaces where users can trade in illicit goods and services. These channels, known as guarantee marketplaces, have multiplied since the incident, with no clear action from Telegram.

The report said:

“The guarantee market ecosystem is a complex one, with many examples of fake marketplaces seeking to defraud its customers, but Elliptic is currently tracking over thirty highly active markets. The closure of Huione Guarantee has created an opportunity for many of these competitors to fill the gap.”

With new and existing marketplaces emerging to fill the gap left by Huione, the analytics experts believe that Telegram needs to enforce a wider crackdown to eliminate these channels.

Meanwhile, the Elliptic report clarified the difference between Huione Guarantee and other businesses within the Huione Group. It was noted that Huione Guarantee had stopped operating in late May, when it ended its escrow services, contrary to reports by other blockchain analytics firms that the marketplace is still active.

According to Elliptic, on-chain data shows that USDT inflow to Huoine-controlled addresses has fallen since late May. However, other businesses of the Huione Group, particularly its payments business Huione Pay, continue to operate.

This has happened despite the US Financial Crimes Enforcement Network (FinCEN) designating the group as a “financial institution of primary money laundering concern.” Interestingly, other Huione Group businesses saw increased activity after the FinCEN designation, with higher average daily volume and an active Huione crypto exchange.

Tudou emerges as a new dominant guarantee marketplace

Meanwhile, one new platform is already positioned to become the next Huione Guarantee. The marketplace known as Tudou Guarantee is already attracting more users, and its inflow is around what Huione saw at its peak. This is unsurprising given that Huione itself promoted Tudou as an alternative for its customers when shutting down, likely because it has a 30% stake in the platform.

The promotion has meant commercial success for Tudou, with the marketplace attracting most merchants that previously used Huione. It is also seeing more than twice its usual number of users, while its inflow is now similar to what Huione had before its shutdown.

However, other marketplaces such as Dali, Fully Light, YY, Shuangying, ShengFeng, and Jinbel have also seen changes in their user numbers since the Huione shutdown, although these changes have not been sustained.

Telegram is facing a surge in crypto scams

Meanwhile, illicit marketplaces are not the only problem that Telegram is dealing with. The messaging platform reportedly faces a surge in crypto scams, with malware attacks increasing by 2,000% this year.

According to an OKX article, the surge in scams on the platform generally includes fake bots, trading groups, and recruitment scams due to Telegram features such as its anonymity, large user base, and ability to host large communities.

Recently, a $50 million scam was uncovered on Telegram, leaving many users with losses after they got involved in over-the-counter deals that offered altcoins at discounts below market prices and short-term vesting periods.

KEY Difference Wire helps crypto brands break through and dominate headlines fast