By cryptoadmin Huione Group, a Cambodian-based firm that’s reportedly behind the most important illicit market is dealing with allegations that it misled blockchain safety firm Certik to provide a positive audit for its newly launched stablecoin, USDH.
In a submit on X, Certik co-founder Ronghui Gu claims that the good contract auditing firm was contacted by a third-party company, which blindsided them from linking the venture with the illicit market.
Certik claims it was misled to audit USDH
Huione Group was uncovered to be behind the Huione Assure Telegram market, which facilitates transactions for cybercrime in Southeast Asia; the platform has reportedly processed over $24 billion in transactions.
In 2024, it reportedly launched the USDH stablecoin, which is pegged to the US greenback and marketed as censorship-resistant to assist customers keep away from the transaction freezes generally related to widespread stablecoins like USDT. This raises issues that the coin is a instrument to help cash laundering.
Following the launch of the USDH, Huione Group contracted Certik, a outstanding blockchain safety agency, to conduct a sensible contract audit for the stablecoin.
The audit recognized 12 safety points: three main, two medium, three minor, and 4 informational points. The foremost points had been across the coin’s centralization. The audit report indicated that six of those points had been resolved, one partially solved, and 5 simply acknowledged.
The coin acquired a Certik Safety Rating of lower than 30%, nevertheless it ran with the audit as a mark of legitimacy regardless.
Nevertheless, there are allegations that Huione Group might need misrepresented or hid crucial data from the audit crew through the audit with a purpose to obtain a positive evaluation.
Certik co-founder Ronghui Gu stated a 3rd occasion had contacted Certik for the audit, which prevented them from rapidly linking the venture with fraudulent actions. Whereas emphasizing that Certik evaluates the code safety and performance and doesn’t carry out KYC or enterprise audits, he added, “We agree that deeper due diligence and additional alerts would’ve helped,” admitting that the corporate might have executed a greater job to guard public curiosity.
Huione Assure has tried to distance itself from the Huione Group, lending credibility to the allegations that the group tricked Certik into giving it a positive audit.
In July 2024, blockchain analytics agency Elliptic revealed an investigative report, which unveiled the group as being behind the illicit market. Following the discharge of this publication, Huione Assure rebranded as Haowang Assure, Huione Group’s funds enterprise, Huione Pay additionally eliminated a bit on its web site devoted to {the marketplace}. Nevertheless, Huione Group stays a “strategic companion and shareholder,” in keeping with statements from {the marketplace}.
Certik’s fame takes a success
This case highlights the challenges within the blockchain and crypto markets relating to venture auditing. Whereas good contract audits assess technical vulnerabilities, they don’t consider the enterprise operations or regulatory compliance of the entities behind the initiatives, which permits dangerous actors to make use of audit experiences as a stamp of legitimacy.
Vocal on-chain sleuth, @tayvano_on X (previously Twitter) additionally alluded to this in a submit, saying “a literal multi-billion greenback cash laundering operation paid CertiK to stamp of approval their new cash laundering contract.”
Others commenting on CertiK’s audit of USDH raised questions in regards to the want for a extra complete analysis framework that features technical assessments and due diligence on the entities behind blockchain initiatives. The blowback might negatively impression Certik’s fame, with critics saying it knowingly took cash to endorse criminals.