Telegram Faces Criticism After Banned Crypto Scam Networks Quickly Rebuild and Return — Has the Crackdown Failed?

Telegram’s Crackdown Backfires As Crypto Scam Markets Make Rapid Comeback

When Telegram abruptly dismantled two of the largest Chinese-language black markets for crypto-related scams last month, it appeared to strike a major blow against online financial crime.

But the void left behind didn’t last long.

According to blockchain analytics firm Elliptic, a swarm of smaller darknet marketplaces has already emerged—and flourished—on the same platform that removed their predecessors.

New Markets Fill The Gap After $35 Billion Shutdown

The shutdown on 13 May targeted two dominant players, Haowang Guarantee and Xinbi Guarantee, both known for facilitating large-scale money laundering and illicit services through Telegram.

These operations collectively enabled over $35 billion in transactions, much of it tied to crypto scams orchestrated from Southeast Asian compounds.

Despite Telegram's sweeping action, Elliptic reports that the black market economy swiftly regrouped.

Over 30 smaller “guarantee marketplaces”—escrow-style trading hubs offering illegal goods and services—have surfaced since.

These new platforms, mostly Chinese-language groups, are again thriving on Telegram with little interference.

Tudou Guarantee Surges As Huione-Linked Replacement

One platform has risen faster than the rest—Tudou Guarantee.

Promoted by Huione Group, which owned Haowang Guarantee, Tudou has more than doubled its user base and now handles nearly $15 million in crypto transactions daily, nearing the volume Haowang once facilitated.

Elliptic says Tudou’s main channel has reached 289,000 users—just shy of Haowang's 296,000 at its peak.

Guarantee Marketplace User Trends Following Huione Guarantee's Closure

Telegram had earlier removed Haowang citing violations of its terms of service.

But the company has taken no action against Tudou, despite similar content and ownership links.

Part of Tudou’s success stems from Huione’s quiet endorsement.

When Haowang shut down, it steered merchants and users directly to Tudou, a platform in which it holds a 30% stake.

Illicit Services Continue Openly On Telegram

Elliptic shared screenshots with WIRED showing Tudou vendors offering everything from scam website development to money laundering services.

Some even include disturbing references to prostitution, featuring terms like “students” and “lolita” alongside photos of young women.

Despite these explicit violations, Telegram has remained largely passive.

Xinbi Guarantee, which was also removed during the May sweep, has since returned under new accounts without even changing its name.

Telegram has not taken action against the newly launched accounts, even after being alerted by Elliptic.

Telegram’s Selective Enforcement Raises Questions

While Telegram did acknowledge the initial takedown of Huione-linked platforms, its response to the resurgence has been inconsistent.

Previously, spokesperson Remi Vaughn told WIRED,

“Criminal activities like scamming or money laundering are forbidden by Telegram’s terms of service and are always removed whenever discovered.”

Yet when pressed about Tudou and other ongoing operations, the company argued that many of these channels are used by Chinese citizens seeking alternatives to state-imposed financial restrictions.

Telegram stated,

“We categorically reject blanket bans. We remain unwavering in our commitment to safeguarding user privacy and defending fundamental freedoms, including the right to financial autonomy.”

Tom Robinson, cofounder of Elliptic, disagrees.

“These are marketplaces that primarily facilitate money laundering for the proceeds of fraud and other illicit activity.”

Scam Economy Persists Despite FinCEN Pressure

Telegram’s action against Huione Guarantee appeared to follow pressure from US regulators.

On 3 May, the Financial Crimes Enforcement Network (FinCEN) labelled Huione Group as a “primary money laundering concern.”

While Huione Guarantee ceased operations weeks later, other arms of the group—such as its payment service Huione Pay—remain active, with some even seeing an uptick in usage.

Jacob Sims, a visiting fellow at Harvard’s Asia Center, suggested the FinCEN designation likely pushed Telegram to act at the time.

But he warned that without continued pressure from authorities, platforms have little incentive to maintain enforcement.

“Unless there's a specific case brought to their attention by law enforcement, tech companies face no real legal culpability.”

Crypto Scams On Telegram Climb 2,000 Percent

The return of black markets isn’t Telegram’s only challenge.

A report from crypto exchange OKX revealed a staggering 2,000% rise in crypto scams on the app this year.

From fake bots to phishing links, Telegram’s open features and anonymity are increasingly exploited by cybercriminals.

In one instance, a $50 million scam involving discounted altcoin offers and false over-the-counter deals left victims across the globe empty-handed.

Scammers used Telegram’s group and channel systems to lure users into deals that never existed.

Erin West, head of anti-scam nonprofit Operation Shamrock, put it bluntly:

“These are bad guys, enabling bad-guy business on their bad-guy platform.”

She added,

“They have the ability to shut down a scam economy and the trafficking of human beings. Instead, they’re hosting Craigslist for crypto scammers.”

As scam groups regroup and multiply, Elliptic warns that unless platforms like Telegram take consistent and proactive measures, the ecosystem of crypto crime will only continue to evolve.