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.
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.
“Huione Group serves as a significant node of the money laundering ecosystem,” the Treasury said in a detailed report of the company’s operations.
A New York Times investigation in March found that Huione’s group of companies were at the heart of a global money laundering network. 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’ anti-laundering departments.
If they come into force, the Treasury’s proposed rules will stop U.S. banks from opening or maintaining accounts for Huione’s group of companies. The rules will also require financial institutions to scrutinize transactions that may be linked to the Cambodian firm.
At present, Huione’s companies do not have a direct banking relationship with U.S. financial institutions, the Treasury said.
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.
A cousin of Cambodia’s prime minister, Hun To, is a director of one Huione company.
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 and other online crimes.
The blockchain analytics firm Elliptic has previously called Huione’s online bazaar the world’s largest illicit internet market and has linked it to $26.8 billion in cryptocurrency transactions since 2021.
“I think this will be a big blow” to Huione Group, said Tom Robinson, a co-founder of Elliptic. “It basically cuts them off from the U.S. financial system.”
Still, many of the bazaar’s public channels remained in operation in May, although Telegram has said that it shut down a number of them.
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 “unusual step” designed to sidestep anti-money laundering rules.
The Treasury said that the parent company and its affiliates operated as “one and the same,” and that the group had taken “no meaningful steps” to address money laundering on its platforms.
In March, the National Bank of Cambodia, which regulates financial institutions, said that it had not renewed the payment company’s license to operate in Cambodia. The company responded by announcing plans to register in Japan and Canada.
The Treasury requested comments on its proposed rules for 30 days after their publication in the Federal Register.
Joy Dong contributed reporting.
Content Source: www.nytimes.com