After Telegram’s $35B Scam Market Crackdown, Dark Crypto Trading Explodes on New Platforms
Telegram slams the door—scammers just kick down the next one.
When the messaging giant banned a $35 billion illicit crypto marketplace last week, regulators cheered. But the 'whack-a-mole' effect struck instantly: trading volumes on alternative darknet channels spiked 300% within 72 hours, according to blockchain forensic firms.
Where the money flowed
Decentralized mixers and privacy coins saw the biggest surges—Monero transactions hit a 2025 high, while Wasabi Wallet volumes doubled. 'It's like squeezing a balloon,' said one Chainalysis investigator. 'The fraud doesn’t disappear; it redistributes.'
The compliance paradox
Every crackdown forces innovation. New escrow services now use AI-generated 'burner' smart contracts that self-destruct after trades. Some OTC desks even offer 'regulator distraction' services—flooding authorities with fake leads while real deals happen elsewhere.
Wall Street’s take? 'Disruptive compliance creates investable opportunities'—translation: hedge funds are shorting surveillance coins while going long on privacy tech. Because nothing fuels crypto like regulatory whiplash.
U.S. crackdown increases
Meanwhile, U.S. regulators ramped up the offense on Huione.
In early May, FinCEN issued a proposed Section 311 rule designating Huione Group a financial institution of primary money‑laundering concern. The rule cited at least $4 billion in illicit proceeds laundered from cyber heists, pig‑butchering fraud, and crypto scams between August 2021 and January 2025.
U.S. authorities escalated enforcement, naming Huione Group a money-laundering threat and sanctioning affiliated wallets and vendors. Later that month, OFAC imposed sanctions on Funnull Technology and two crypto wallets linked to Huione Group for facilitating pig‑butchering scams resulting in over $200 million in losses.
Despite the dismantling of its most visible back‑end, Huione Pay, the Group’s Cambodia‑based payment service provider, continues operations. The Huione umbrella also includes a crypto exchange and its own stablecoin, USDH, launched in an effort to evade restrictions tied to third‑party tokens like USDT.
