Telegram bans major Chinese crypto scam markets but they quickly return

In May 2023, Telegram took significant action by banning two major black market channels, Haowang Guarantee and Xinbi Guarantee, which collectively facilitated approximately $35 billion in crypto scam-related transactions. These operations were known for their involvement in money laundering activities affecting victims mainly in Western countries, as well as the exploitation of forced labor in several Southeast Asian countries including Cambodia, Myanmar, and Laos. Despite these bans, a new marketplace, Tudou Guarantee, emerged rapidly to fill the void left by the closures, indicating a troubling resilience in the industry. The crypto tracing firm Elliptic reported that Tudou Guarantee, partially owned by Huione Group, has experienced significant growth, boasting nearly 289,000 users shortly after the bans took effect. This resurgence suggests that the mechanisms of these markets were not only quick to adapt but also highlight an ongoing challenge for Telegram and other platforms in curbing illicit activities. Notably, the past activities of Haowang Guarantee included selling services that were used in scams, further emphasizing the seriousness of the situation. Telegram's response to prior reports raised by media outlets and firms like Elliptic had been to conduct widespread purges of accounts involved in criminal activities. However, following the recent ban, investigation by Elliptic revealed ongoing money laundering activities linked to ten additional markets. This raises questions about the effectiveness and commitment of Telegram to its own policies against scams and financial crimes. Former prosecutors and watchdog groups have voiced their concerns over Telegram's inaction, arguing that the platform has the capability to disrupt these criminal networks but lacks the motivation to do so consistently. Given the recent designation of Huione Group by the US Treasury's Financial Crimes Enforcement Network as a primary money laundering concern, it's necessary for Telegram to adopt a more proactive approach in managing and monitoring these marketplaces to protect victims and uphold its terms of service.