What happened?
Telegram shut down Huione Guarantee, which was the largest illicit marketplace in history with over $27 billion in transactions. Despite this action, rival platforms experienced a surge in volume by 400% as they absorbed the displaced criminal user base almost immediately. The successor platform, Tudou Guarantee, managed to capture the same level of activity within weeks of Huione’s shutdown.
Who does this affect?
This affects everyone involved in the criminal activities facilitated by Huione Guarantee, from those directly engaged in money laundering and identity theft to victims of scams such as “pig butchering.” It further impacts law enforcement and regulatory bodies trying to curb illegal activities on encrypted platforms like Telegram. Ordinary users could also be affected as they might accidentally fall victim to these scams or have their data compromised.
Why does this matter?
The shutdown and subsequent rise of new platforms illustrate the challenges in regulating and policing encrypted communication tools that can facilitate crime. The rapid absorption and continuation of illicit activities highlight a significant impact on the market, with competing platforms quickly filling the gap left by Huione. This situation has far-reaching implications for cryptocurrency markets, as stablecoins like USDT remain the currency of choice for these unregulated transactions, which in turn complicates efforts to use blockchain for legitimate financial activities.