Cambodia’s central bank ordered financial services conglomerate Huione Group to shut down its payment services arm last week, following a slew of global controversies and increasing pressure on the pariah firm.
The announcement from the National Bank of Cambodia that it was revoking Huione Pay’s license came after a bank run on customer deposits earlier in the month that had forced the company to freeze withdrawals, according to reporting from CoinDesk.
Huione Group has been accused by the U.S. Treasury Department of moving money for criminal groups, including Chinese gangs that operate vast networks of scam compounds in Southeast Asia and North Korean crypto hackers. A New York Times investigation published in March detailed how Huione Group facilitated money laundering in the notorious Golden Triangle region across Thailand, Laos and Myanmar.
Regulatory scrutiny has escalated sharply. U.S. authorities designated Huione a “primary money-laundering concern” in May, effectively cutting it off from the American financial system, and launched a joint effort with the United Kingdom to target the criminal groups that rely on Huione’s services. Cambodian regulators have also imposed penalties as pressure mounts. And last month, South Korea added its own sanctions on Huione Group, widening the international crackdown.
ICIJ’s Coin Laundry investigation found that Huione Group used the major cryptocurrency exchanges Binance and OKX to move hundreds of millions of dollars worth of digital currency, even after the group was labeled a money laundering threat and after both Binance and OKX pleaded guilty to violating U.S. anti-money laundering laws.
Hundreds of millions of dollars in tether from Huione Group ended up in customer accounts at Binance and OKX
ICIJ sought comment from Huione by sending a request to two email addresses associated with the company. Both those addresses have been disabled.
In response to questions about the Huione Group transactions, Binance told ICIJ it works closely with global law enforcement and is an industry leader in identifying and reacting to suspicious deposits. OKX said that it invests heavily in compliance and that it “took proactive steps to restrict relevant accounts” even before the group was labeled a money laundering concern.
In a statement posted on LinkedIn last week, the Cambodian National Bank said it revoked Huione Pay’s operating license and has liquidated its assets. The financial institution noted in its statement that the circulation of crypto assets in relation to Huione “may pose risks to the banking system in Cambodia as well as the public.” ICIJ has requested comment from the National Bank.
The National Bank of Cambodia reportedly told Huione Pay customers whose deposits were frozen to visit its office in Phnom Penh to withdraw their funds following the firm’s shutdown and liquidation. Local media in Cambodia reported in the wake of Huione Pay freezing customer withdrawals that signage posted on the front door of the company’s office in the country’s capital detailed how customers could receive their funds.
The notice, written in Chinese, reportedly stated that customers could buy “high-yield financial products” and receive their full principal over 18 months. The statement reportedly said that problems stemmed from “recent changes in the external market environment,” and that “the delayed payment is a necessary measure due to the concentrated run on funds.”
