Shocking: Huione Guarantee Shutdown Sparks Proliferation of 30+ Crypto Darknet Markets, Elliptic Reports

The world of illicit online activity recently saw a significant event: the shutdown of a major player, Huione Guarantee. For those tracking the darker corners of the crypto space, this event sent ripples. But did it actually curb activity? According to a new Elliptic report, the answer is a resounding ‘no’. Instead, the void left by one crypto darknet market has been rapidly filled by many others, presenting a fresh challenge in the fight against crypto crime.

What Happened to Huione Guarantee?

Huione Guarantee, a significant darknet marketplace operating primarily via Telegram, ceased operations in May after Telegram banned thousands of its associated accounts and channels. This shutdown was initially seen as a victory against platforms enabling illicit transactions, including stolen data and money laundering services.

However, market dynamics quickly showed that the demand for such services persists. Users and merchants who relied on Huione Guarantee needed new platforms, and the darknet ecosystem was ready to provide them.

The Rise of New Darknet Marketplaces

Elliptic’s analysis highlights a rapid shift following the Huione Guarantee closure. Rather than disappearing, the activity simply moved. Elliptic is tracking over 30 Telegram-based dark markets that saw increased user activity and transaction volume. Among these, one platform emerged as the clear leader:

• **Tudou Guarantee:** This marketplace is identified as the primary beneficiary of Huione’s shutdown. Elliptic’s data shows Tudou Guarantee’s user base has more than doubled since May.
• **Transaction Volume:** Cryptocurrency inflows to Tudou Guarantee are now approximately equal to the volumes previously seen by Huione Guarantee before its closure.
• **Merchant Migration:** Along with users, merchants offering illicit goods and services have also migrated from Huione to Tudou and other platforms.

Interestingly, Elliptic notes that Huione Guarantee held a 30% stake in Tudou Guarantee since acquiring it in December. This suggests a potential complex relationship or even a planned pivot.

Clarifying Huione’s Status: Elliptic vs. Chainalysis

There has been some confusion regarding whether Huione Guarantee is truly defunct. Analysts at Chainalysis reportedly observed continued or even increased activity linked to ‘Huione’ since the shutdown.

The Elliptic report clarifies this potential discrepancy. Elliptic distinguishes between Huione Guarantee and other businesses under the Cambodian conglomerate Huione Group, particularly Huione Pay. Huione Pay is a large, legitimate payments business with physical locations that also handles significant crypto volume, some of which may be linked to laundering scam proceeds.

Elliptic’s granular analysis shows that while Huione Pay continues high-volume transactions, transactions specifically linked to Huione Guarantee’s escrow services dropped to negligible levels by late May. This suggests the darknet marketplace aspect of Huione is indeed shut down, while other parts of the Huione Group continue operating.

The Enduring Challenge of Crypto Crime Enablers

The shutdown of Huione Guarantee sent ‘shockwaves’ through the dark market ecosystem, but it ultimately created a power vacuum that competitors quickly filled. This highlights a key challenge in combating crypto crime enabled by such platforms.

Simply taking down one marketplace often leads to the rapid emergence and growth of others. Elliptic concludes that a broader, sustained effort is needed, specifically calling for the ongoing removal of these marketplaces from platforms like Telegram, to effectively disrupt the global scam epidemic they facilitate.

Summary

The closure of the Huione Guarantee crypto darknet market was a notable event, but it hasn’t reduced overall illicit activity. Instead, it has triggered a significant migration of users and merchants to other platforms, most notably Tudou Guarantee, which has seen explosive growth. The Elliptic report provides clear data on this shift and helps clarify the status of Huione Guarantee versus other Huione Group businesses. This underscores the persistent challenge posed by darknet marketplaces and the need for comprehensive strategies beyond targeting individual platforms to combat crypto crime.