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The Trump administration designated a Cambodian financial conglomerate as a money-laundering operation on Thursday, taking the first step to sever its access to the American financial system.<\/p>\n
The Treasury Department said that since August 2021, the company, Huione Group, and its affiliates had laundered $4 billion for criminals, including hackers in North Korea and scammers in Southeast Asia.<\/p>\n
\u201cHuione Group serves as a significant node of the money laundering ecosystem,\u201d the Treasury said in a detailed report of the company\u2019s operations.<\/p>\n
A New York Times investigation in March<\/a> found that Huione\u2019s group of companies were at the heart of a global money laundering network<\/a>. Online scammers, who defraud victims with bogus investments or other schemes, rely on Huione and its affiliates to move money overseas while evading law enforcement authorities and banks\u2019 anti-laundering departments.<\/p>\n<\/div>\n<\/div>\n If they come into force, the Treasury\u2019s proposed rules will stop U.S. banks from opening or maintaining accounts for Huione\u2019s group of companies. The rules will also require financial institutions to scrutinize transactions that may be linked to the Cambodian firm.<\/p>\n At present, Huione\u2019s companies do not have a direct banking relationship with U.S. financial institutions, the Treasury said.<\/p>\n Huione is best known in Cambodia for its QR codes, which customers use to pay bills in hotels, restaurants and supermarkets. But other Huione affiliates serve as clearinghouses for money launderers, The Times found. One company hosts an online bazaar, made up of thousands of Telegram chat groups, that connects scammers with money movers. Another is more directly involved in laundering money.<\/p>\n<\/div>\n<\/div>\n A cousin of Cambodia\u2019s prime minister, Hun To, is a director of one Huione company.<\/p>\n The Treasury Department said that Huione and its affiliates had laundered nearly $40 million from heists conducted by North Korean hackers, and the Lazarus Group in particular. The Lazarus Group is backed by the North Korean government and has been linked to major hacks<\/a> and other online crimes.<\/p>\n The blockchain analytics firm Ellipitic has previously called Huione\u2019s online bazaar the world\u2019s largest illicit internet market and has linked it to $26.8 billion in cryptocurrency transactions since 2021.<\/p>\n \u201cI think this will be a big blow\u201d to Huione Group, said Tim Robinson, a co-founder of Elliptic. \u201cIt basically cuts them off from the U.S. financial system.\u201d<\/p>\n Still, many of the bazaar\u2019s public channels remained in operation in May, although Telegram has said that it shut down a number of them.<\/p>\n Last year, the bazaar issued its own cryptocurrency, pegged to the U.S. dollar, which it said would not be subject to freezing orders from law-enforcement agencies. The Treasury described this as an \u201cunusual step\u201d designed to sidestep anti-money laundering rules.<\/p>\n<\/div>\n<\/div>\n The Treasury said that the parent company and its affiliates operated as \u201cone and the same,\u201d and that the group had taken \u201cno meaningful steps\u201d to address money laundering on its platforms.<\/p>\n In March, the National Bank of Cambodia, which regulates financial institutions, said that it had not renewed the payment company\u2019s license to operate in Cambodia. The company responded by announcing plans to register in Japan and Canada.<\/p>\n The Treasury requested comments on its proposed rules for 30 days after their publication in the Federal Register.<\/p>\n Joy Dong contributed reporting.<\/p>\n<\/div>\n<\/div>\n