Cambodian Payment Company Assisted Lazarus Group in Washing $150,000 of Illegally Obtained Cryptocurrency

The Cambodian currency exchange and payment service provider Huione Pay has been linked to the laundering of over $150,000 in cryptocurrency that was stolen by the infamous North Korean hacking group Lazarus.

A report from Reuters on Monday indicated that the Phnom Penh-based firm received the illicit funds between June of last year and February of this year, as shown by blockchain data.

The stolen cryptocurrency was associated with hacks of three cryptocurrency companies executed by Lazarus in June and July of the previous year.

Huione Pay Claims Unawareness of Stolen Funds

In a statement, Huione Pay asserted that it was not aware of receiving funds indirectly connected to the hacks.

CAMBODIA: It’s been a challenging week for Huione, as @_tom_wilson_ for Reuters reports that Huione received over $150k from a digital wallet utilized by the North Korean hacking group Lazarus. The funds were traced back to a much larger theft of $160 million from three crypto firms last year. 1/7 https://t.co/caFgORafMv

— CyberScamMonitor (@CyberScamWatch) July 15, 2024

Meanwhile, the National Bank of Cambodia (NBC) informed Reuters that payment firms in the nation are barred from engaging in cryptocurrencies and digital assets.

This prohibition, enacted in 2018, aims to reduce risks linked to the volatility of cryptocurrencies, cybercrime, and the potential for money laundering and terrorist financing.

The NBC suggested that it may take corrective measures against Huione Pay, although it did not specify any intended actions.

Despite the anonymity associated with cryptocurrency transactions, the public ledger of the blockchain enables tracking of movements from one wallet to another.

The U.S.-based blockchain analysis firm TRM Labs reported that Huione Pay was among several payment platforms and over-the-counter (OTC) brokers that received a significant portion of the cryptocurrency stolen in the Atomic Wallet hack.

OTC brokers facilitate private cryptocurrency transactions, providing more privacy than conventional exchanges.

TRM Labs revealed that the hackers executed a sophisticated laundering scheme, converting the stolen cryptocurrency into various forms, including tether (USDT), a stablecoin tied to the U.S. dollar.

They employed the Tron blockchain, recognized for its speed and low transaction fees, to perform these conversions.

The majority of the laundered funds were directed to exchanges, services, and OTC brokers, including Huione Pay.

Scam Operators Thrive on Huione Guarantee

Huione Guarantee, an online marketplace run by the Cambodian conglomerate Huione Group, has been implicated in facilitating online scams across Southeast Asia.

Reportedly, the platform has enabled transactions surpassing $11 billion, with a considerable portion of these funds associated with money laundering and cyber scams, according to a recent research report by Elliptic.

Utilizing blockchain analytics, the Elliptic research team was able to quantify the cryptocurrency transactions occurring on Huione Guarantee.

The marketplace primarily operates in Chinese and involves numerous instant messaging app channels, each overseen by different merchants.

These merchants provide various services that are essential to the functioning of cyber scams.

It is noteworthy that the cryptocurrency market has demonstrated significant resilience in challenging times, achieving a record recovery rate of 77% for stolen funds in the second quarter of 2024.

In Q2 2024, $347.4 million of the stolen cryptocurrency was successfully recovered or frozen out of a total of $512.9 million lost, according to Hacken’s Web3 Security Report Q2 2024.

“For the second consecutive quarter, the silver lining amid the alarming rate of theft in crypto is the amount of funds recovered,” the report stated.

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