Rule2025-19571
Imposition of Special Measure Regarding Huione Group, as a Foreign Financial Institution of Primary Money Laundering Concern
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Published
October 16, 2025
Effective
November 17, 2025
Issuing agencies
Treasury DepartmentFinancial Crimes Enforcement Network
Abstract
FinCEN is issuing this final rule to prohibit covered U.S. financial institutions from opening or maintaining a correspondent account for, or on behalf of Huione Group, a foreign financial institution based in Cambodia found to be of primary money laundering concern pursuant to section 311 of the USA PATRIOT Act. The rule further requires covered financial institutions to apply special due diligence to their foreign correspondent accounts that is reasonably designed to guard against the use of such accounts to process transactions involving Huione Group.
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<title>Federal Register, Volume 90 Issue 198 (Thursday, October 16, 2025)</title>
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[Federal Register Volume 90, Number 198 (Thursday, October 16, 2025)]
[Rules and Regulations]
[Pages 48295-48312]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19571]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 90, No. 198 / Thursday, October 16, 2025 /
Rules and Regulations
[[Page 48295]]
DEPARTMENT OF THE TREASURY
Financial Crimes Enforcement Network
31 CFR Part 1010
RIN 1506-AB68
Imposition of Special Measure Regarding Huione Group, as a
Foreign Financial Institution of Primary Money Laundering Concern
AGENCY: Financial Crimes Enforcement Network (FinCEN), Treasury.
ACTION: Final rule.
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SUMMARY: FinCEN is issuing this final rule to prohibit covered U.S.
financial institutions from opening or maintaining a correspondent
account for, or on behalf of Huione Group, a foreign financial
institution based in Cambodia found to be of primary money laundering
concern pursuant to section 311 of the USA PATRIOT Act. The rule
further requires covered financial institutions to apply special due
diligence to their foreign correspondent accounts that is reasonably
designed to guard against the use of such accounts to process
transactions involving Huione Group.
DATES: This final rule is effective November 17, 2025.
FOR FURTHER INFORMATION CONTACT: FinCEN's Regulatory Support Section at
<a href="http://www.fincen.gov/contact">www.fincen.gov/contact</a>.
SUPPLEMENTARY INFORMATION:
I. Background
A. Statutory Provisions
Section 311 of the USA PATRIOT Act (section 311), codified at 31
U.S.C. 5318A, grants the Secretary of the Treasury (Secretary) the
authority to make a finding that ``reasonable grounds exist for
concluding'' that any of the following ``is of primary money laundering
concern:
<bullet> A jurisdiction outside of the United States;
<bullet> One or more financial institutions operating outside of
the United States;
<bullet> One or more classes of transactions within, or involving,
a jurisdiction outside of the United States; or
<bullet> One or more types of accounts.'' \1\
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\1\ 31 U.S.C. 5318A(a)(1).
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Upon making such a finding, the Secretary is authorized to require
domestic financial institutions and domestic financial agencies to take
certain ``special measures.'' \2\ The five special measures set out in
section 311 are safeguards that may be employed to defend the U.S.
financial system from money laundering and terrorist financing risks.
The Secretary may impose one or more of these special measures to
protect the U.S. financial system from such threats. Through special
measures one through four, the Secretary may impose additional
recordkeeping, information collection, and reporting requirements on
covered domestic financial institutions and domestic financial
agencies--collectively, ``covered financial institutions.'' \3\ Through
special measure five, the Secretary may ``prohibit, or impose
conditions upon, the opening or maintaining in the United States of a
correspondent account or payable-through account'' for or on behalf of
a foreign banking institution, if such correspondent account or
payable-through account involves the foreign financial institution
found to be of primary money laundering concern.\4\
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\2\ On October 26, 2001, the President signed into law the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Public Law
107-56 (USA PATRIOT Act). Title III of the USA PATRIOT Act amended
the anti-money laundering (AML) provisions of the Bank Secrecy Act
(BSA) to promote the prevention, detection, and prosecution of
international money laundering and the financing of terrorism. The
BSA, as amended, is the popular name for a collection of statutory
authorities that FinCEN administers that is codified at 12 U.S.C.
1829b, 1951-1960 and 31 U.S.C. 5311-5314, 5316-5336, and includes
other authorities reflected in notes thereto. Regulations
implementing the BSA appear at 31 CFR Chapter X.
\3\ 31 U.S.C. 5318A(b)(1)-(4). The term ``covered financial
institution'' has the same meaning as provided at 31 CFR
1010.605(e)(1); see infra section IV.A.3.
\4\ 31 U.S.C. 5318A(b)(5).
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Before making a finding that reasonable grounds exist for
concluding that a financial institution outside of the United States
(or other jurisdiction, account, or class of transactions) is of
primary money laundering concern, the Secretary is required to consult
with both the Secretary of State and the Attorney General.\5\ In
addition, in the case of a decision to apply one or more of the special
measures, in making a finding that reasonable grounds exist for
concluding that a financial institution outside of the United States is
of primary money laundering concern, the Secretary is required to
consider such information as the Secretary determines to be relevant,
including the following potentially relevant institutional factors:
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\5\ 31 U.S.C. 5318A(c)(1).
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<bullet> The extent to which such a financial institution is used
to facilitate or promote money laundering in or through a jurisdiction
outside the United States, including any money laundering activity by
organized criminal groups, international terrorists, or entities
involved in the proliferation of weapons of mass destruction (WMD) or
missiles;
<bullet> The extent to which such a financial institution is used
for legitimate business purposes in the jurisdiction; and
<bullet> The extent to which such action is sufficient to ensure,
with respect to transactions involving the jurisdiction and
institutions operating in the jurisdiction, that the purposes of
section 311 continue to be fulfilled, and to guard against
international money laundering and other financial crimes.\6\
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\6\ 31 U.S.C. 5318A(c)(2)(B)(i)-(iii). In addition, in the case
of a finding relating to a particular jurisdiction, section 311 sets
out certain ``jurisdictional factors'' that the Secretary may
consider, which are not relevant here. See 31 U.S.C.
5318A(c)(2)(A)(i)-(vii).
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In selecting one or more special measures, the Secretary ``shall
consult with the Chairman of the Board of Governors of the Federal
Reserve System, any other appropriate Federal banking agency (as
defined in section 3 of the Federal Deposit Insurance Act), the
Secretary of State, the Securities and Exchange Commission, the
Commodity Futures Trading Commission, the National Credit Union
Administration Board, and in the sole discretion of the Secretary, such
other agencies and interested parties as the Secretary may find
appropriate.'' \7\ When imposing special measure five, the Secretary
must do so ``in consultation with the Secretary of State, the Attorney
General, and the Chairman of the Board of Governors of the Federal
Reserve
[[Page 48296]]
System.'' \8\ In addition, the Secretary is required to consider the
following factors:
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\7\ 31 U.S.C. 5318A(a)(4)(A).
\8\ 31 U.S.C. 5318A(b)(5).
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<bullet> Whether similar action has been or is being taken by other
nations or multilateral groups;
<bullet> Whether the imposition of any particular special measure
would create a significant competitive disadvantage, including any
undue cost or burden associated with compliance, for financial
institutions organized or licensed in the United States;
<bullet> The extent to which the action or the timing of the action
would have a significant adverse systemic impact on the international
payment, clearance, and settlement system, or on legitimate business
activities involving the particular jurisdiction, institution, class of
transactions, or type of account; and
<bullet> The effect of the action on United States national
security and foreign policy.\9\
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\9\ 31 U.S.C. 5318A(a)(4)(B)(i)-(iv).
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The authority of the Secretary to administer the Bank Secrecy Act
(BSA) and its implementing regulations, including the authority under
section 311 to make such a finding and to impose special measures, has
been delegated to the Director of FinCEN.\10\
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\10\ See Treasury Order 180-01 (Jan. 14, 2020).
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B. Huione Group
Huione Group \11\ is a financial services conglomerate based in
Phnom Penh, Cambodia.\12\ Huione Group is the parent company of, or
otherwise controls, several subsidiaries, affiliates, and components--
including, but not limited to: Haowang Guarantee, Huione Pay PLC, and
Huione Crypto (the ``Components'')--that coordinate to provide services
that are useful for money laundering and carrying out cyber scams.
FinCEN assesses that, as discussed below, Huione Group and its
Components operate as a coordinated collective, and for that reason,
FinCEN will correspondingly refer to Huione Group and its Components as
the ``Huione Group.''
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\11\ Huione Group is the parent company of several subsidiaries
and components, including Haowang Guarantee, Huione Pay PLC, and
Huione Crypto. FinCEN assesses that this grouping of exchange
services operates as a coordinative collective, and for that reason,
FinCEN will correspondingly refer to the collective as the ``Huione
Group.''
\12\ Cambodia Corporate Registry, ``Huione'' Search, <a href="https://www.businessregistration.moc.gov.kh/cambodia-master/service/create.html?targetAppCode=cambodia-master&targetRegisterAppCode=cambodia-br-companies&service=registerItemSearch">https://www.businessregistration.moc.gov.kh/cambodia-master/service/create.html?targetAppCode=cambodia-master&targetRegisterAppCode=cambodia-br-companies&service=registerItemSearch</a> (last accessed Oct. 7, 2025);
Huione Pay, Index, formerly available at <a href="https://www.huionepay.com.kh/index/help">https://www.huionepay.com.kh/index/help</a>; Huione Group, About, which is no
longer accessible and will be discussed later in this section,
formerly available at <a href="https://huione.com/html/about.jsp">https://huione.com/html/about.jsp</a> (last
accessed Sept. 24, 2024). Huione Crypto has numerous job
announcements with a work location in Phnom Penh, Cambodia. See
Huione Crypto, Career Opportunities, formerly available at <a href="https://www.huione.io/en-US/careerOpportunities">https://www.huione.io/en-US/careerOpportunities</a> (last accessed Mar. 27,
2025). Haowang Guarantee also lists job announcements with a work
location in Phnom Penh, Cambodia. See Haowang Guarantee, About,
formerly available at <a href="https://www.hwdb.la/about/">https://www.hwdb.la/about/</a> (last accessed Mar.
27, 2025). This information was previously available as of the
issuance of the NPRM, however, it has since been removed by Haowang
Guarantee, resulting in a ``page not found'' error. FinCEN assesses
that this change is more likely than not caused by negative public
attention following a series of reports by blockchain analytic firms
on money laundering occurring at Huione Group.
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Although it was originally incorporated in Hong Kong in 2018 as
Huione Group Limited, Huione Group, the controlling entity of the
conglomerate, does not appear to be registered as a business in any
jurisdiction,\13\ and several of Huione Group's Components have been
registered outside of Cambodia. Nevertheless, Huione Group's website is
registered \14\ to an individual with a listed location of Phnom Penh,
Cambodia and Huione Group's operations are principally carried out in
Cambodia.
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\13\ Hong Kong Companies Registry, Huione Group Limited, at p.
54, <a href="https://www.cr.gov.hk/docs/wrpt/RNC063_2018.12.17-2018.12.23.pdf">https://www.cr.gov.hk/docs/wrpt/RNC063_2018.12.17-2018.12.23.pdf</a>.
\14\ The registration is valid through June 3, 2026. See ICANN,
<a href="http://Huione.com">Huione.com</a>, <a href="https://lookup.icann.org/en/huione.com">https://lookup.icann.org/en/huione.com</a> (last accessed
Oct. 7, 2025).
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For years, Huione Group has laundered illicit proceeds from
cybercrimes--namely, cyber heists carried out by the Lazarus Group,\15\
an entity sanctioned by Treasury's Office of Foreign Assets Control
(OFAC)--and Convertible Virtual Currency (CVC) investment scams carried
out by transnational criminal organizations (TCOs) based in Southeast
Asia.\16\
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\15\ The Lazarus Group is an agency, instrumentality, or
controlled entity of the government of the Democratic People's
Republic of Korea, that has stolen large volumes of Convertible
Virtual Currency in numerous and often widely reported cyber heists.
On September 13, 2019, the Lazarus Group was sanctioned by OFAC. See
Department of the Treasury, Press Release, Treasury Sanctions North
Korean State-Sponsored Malicious Cyber Groups, (Sept. 13, 2019),
<a href="https://home.treasury.gov/news/press-releases/sm774">https://home.treasury.gov/news/press-releases/sm774</a>.
\16\ These scams are also referred to as ``pig butchering.'' See
FinCEN, FIN-2023-Alert005, FinCEN Alert on Prevalent Virtual
Currency Investment Scam Commonly Known as ``Pig Butchering'' (Sept.
8, 2023), <a href="https://www.fincen.gov/sites/default/files/shared/FinCEN_Alert_Pig_Butchering_FINAL_508c.pdf">https://www.fincen.gov/sites/default/files/shared/FinCEN_Alert_Pig_Butchering_FINAL_508c.pdf</a>.
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II. FinCEN's Section 311 Rulemaking Regarding Huione Group
In a notice of proposed rulemaking (NPRM) published in the Federal
Register on May 5, 2025, FinCEN found that reasonable grounds exist for
concluding that Huione Group is a foreign financial institution of
primary money laundering concern pursuant to 31 U.S.C. 5318A.\17\
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\17\ FinCEN, Special Measure Regarding Huione Group, as a
Foreign Financial Institution of Primary Money Laundering Concern,
90 FR 18934 (May 5, 2025).
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As described in the NPRM, since its establishment, Huione Group has
set up a network of businesses, each playing a different role in its
money laundering enterprise. However, FinCEN's analysis of Huione Group
has identified the sharing of CVC infrastructure by Huione Group's
constituent entities, indicating that the entities, including the
controlling entity Huione Group, are functionally operating as one and
the same, despite the various branding. Because Huione Group shares CVC
infrastructure, the structure makes it challenging to ascertain the
specific Component involved in any particular transaction.
The overall Huione Group network offers services ranging from an
online marketplace selling items useful for carrying out cyber scams to
money laundering services that accept both fiat currencies and CVC.
Huione Group has also created its own stablecoin, a type of CVC that is
usually backed by a pre-determined quantity of fiat currency, most
often the U.S. dollar (USD). The stablecoin, ``USDH,'' which is a
ticker symbol for ``U.S. Dollar Huione,'' is pegged to the USD at a
one-to-one ratio and is represented as a stablecoin that cannot be
frozen.\18\ In contrast, many stablecoin issuers develop their
stablecoins to retain the ability to freeze funds, which they have
sometimes done in cases of known criminal activity, or at the request
of law enforcement. Because Huione Group claims that USDH cannot be
frozen, this service offers Huione Group's clientele a virtually risk-
free ecosystem to move or store CVC without the possibility of
interception or ``freezing'' by law enforcement.
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\18\ See <a href="https://huione.money">https://huione.money</a> (website for ``USDH (Huione USD),
Stablecoin that Never be freezed'' describing USDH as ``[a]
stablecoin pegged 1:1 to the US Dollar launched by Huione Labs under
Huione Group.''); Huione Crypto, USDH is a stable currency in one
word!, formerly available at <a href="https://huione.io/en-us/introduce">https://huione.io/en-us/introduce</a> (last
accessed Mar. 27, 2025).
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Indeed, much of the illicit revenue laundered through Huione Group
originates from well-documented criminal activity, and numerous
publicly available reports describe the failings of Huione Group's
anti-money laundering/know your customer (AML/KYC) program. Despite
these reports and Huione Group's public
[[Page 48297]]
acknowledgments of its failings,\19\ FinCEN assesses that Huione Group
has no meaningful AML/KYC program, even after FinCEN issued the NPRM on
May 5, 2025.\20\
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\19\ Following negative public reporting about Huione Group in
July 2024, Huione Group provided a statement to ABC News, stating
that ``. . . because our [Huione Group's] services are all public,
covering Asia, Europe and America, and the privacy attributes of
[CVC] are superimposed, our KYC [know your customer] capabilities
are now seriously insufficient.'' See ABC News, Cambodian online
marketplace outed as one-stop shop for scammers' money laundering
and `detention equipment' needs (July 26, 2024), <a href="https://www.abc.net.au/news/2024-07-27/online-marketplace-for-money-laundering-and-scammers/104131624">https://www.abc.net.au/news/2024-07-27/online-marketplace-for-money-laundering-and-scammers/104131624</a>; see also The Record, Tether
freezes $29 million of cryptocurrency connected to Cambodian
marketplace accused of fueling scams (July 15, 2024), <a href="https://therecord.media/tether-freezes-29-million-crypto-connected-to-scam-marketplace">https://therecord.media/tether-freezes-29-million-crypto-connected-to-scam-marketplace</a>; Elliptic, Huione Guarantee: The multi-billion dollar
marketplace used by online scammers (July 9, 2024, updated Mar. 27,
2025), <a href="https://www.elliptic.co/blog/cyber-scam-marketplace">https://www.elliptic.co/blog/cyber-scam-marketplace</a>;
Elliptic, Huione: The Company Behind the Largest Ever Illicit Online
Marketplace Has Launched a Stablecoin (Jan. 14, 2025), <a href="https://www.elliptic.co/blog/huione-largest-ever-illicit-online-marketplace-stablecoin">https://www.elliptic.co/blog/huione-largest-ever-illicit-online-marketplace-stablecoin</a>; Chainalysis, 2024 Crypto Crime Mid-year Update Part 2:
China-based CSAM and Cybercrime Networks on the Rise, Pig Butchering
Scams Remain Lucrative (Aug. 29, 2024), <a href="https://www.chainalysis.com/blog/2024-crypto-crime-mid-year-update-part-2/">https://www.chainalysis.com/blog/2024-crypto-crime-mid-year-update-part-2/</a>.
\20\ In a June 18, 2025 comment on the NRPM, outside counsel for
Huione Pay PLC claimed that ``Huione Pay PLC is an independent
entity and is undertaking substantial efforts to address and
remediate compliance issues raised by the [NPRM]'' For reasons
explained in Section II.C.1, FinCEN continues to assess that Huione
Pay PLC is a component of Huione Group. See infra Section II.C.1.
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This Final Rule (1) sets forth FinCEN's finding, based on public
and non-public information, that Huione Group is a financial
institution operating outside of the United States of primary money
laundering concern; and (2) imposes special measure five, which
prohibits covered financial institutions from opening or maintaining a
correspondent account for, or on behalf of, Huione Group.
A. Findings
Section 311 authorizes FinCEN, through delegated authority and in
relevant part, to make a finding ``that reasonable grounds exist for
concluding'' that ``[one] or more financial institutions operating
outside of the United States'' is ``of primary money laundering
concern.'' \21\ A prerequisite to such a finding is that the relevant
institution is a ``financial institution operating outside of the
United States.'' \22\
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\21\ 31 U.S.C. 5318A(a)(1).
\22\ 31 U.S.C. 5318A(a)(1) authorizes the imposition of special
measures on, among others, ``financial institutions operating
outside of the United States.'' Of the five special measures
authorized by the statute, the fifth measure authorizes
``Prohibitions or Conditions on Opening or Maintaining Certain
Correspondent or Payable-Through Accounts.'' The statute goes on to
define the terms correspondent account and payable-through account
in reference to payments made on behalf of a ``foreign financial
institution''--a term otherwise undefined. For the purposes of this
final rule, and under these facts, FinCEN finds that Huione Group is
both a foreign financial institution and a financial institution
outside of the United States.
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The BSA defines a ``financial institution'' to be any of several
categories of entities, including money transmitters.\23\ The BSA
defines a money transmitter as including ``a licensed sender of money
or any other person who engages as a business in the transmission of
currency funds, or value that substitutes for currency.'' \24\ A money
transmitter does not require a particular license, corporate structure,
or physical location.
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\23\ See 31 U.S.C. 5312(a)(2).
\24\ 31 U.S.C. 5312(a)(2)(R) (allowing ``a licensed sender of
money or any other person . . .'' to constitute money transmitter).
FinCEN's implementing regulations define ``person'' broadly as ``an
individual, a corporation, a partnership, a trust or estate, a joint
stock company, an association, a syndicate, joint venture, or other
unincorporated organization or group, an Indian Tribe (as that term
is defined in the Indian Gaming Regulatory Act), and all entities
cognizable as legal personalities.'' 31 CFR 1010.100(mm).
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As detailed further below, much of Huione Group's illicit money
transmitting activity occurs through transactions in CVC. This is
consistent with the money transmitter definition, which includes
services in CVC. FinCEN's 2019 Guidance on CVC explains that for the
purposes of the BSA's implementing regulations, persons ``may be a
money transmitter . . . regardless of the technology employed for the
transmittal of value or the type of asset the person uses as value that
substitutes for currency, or whether such asset is physical or
virtual.'' \25\ For the reasons explained in that Guidance, the term
``value that substitutes for currency'' includes CVC.\26\
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\25\ FinCEN, FIN-2019-G001, Application of FinCEN's Regulations
to Certain Business Models Involving Convertible Virtual Currencies
(May 9, 2019), at Section 1.2.3, <a href="https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf">https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf</a>.
\26\ Id. at Sections 1.2.1, 1.3.
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1. Huione Group and Its Identified Components Are Each a Financial
Institution
Huione Group is a parent entity that controls the following
constituent entities or Components: \27\ Haowang Guarantee; Huione Pay
PLC; and Huione Crypto. FinCEN finds that reasonable grounds exist to
conclude that Huione Group and each of the Components engages in the
business of money transmission, and is therefore a financial
institution under the BSA and its implementing regulations.
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\27\ As explained further in Section II.B, since the NPRM was
issued, Huione Group changed its business structure in an apparent
effort to counter governmental scrutiny, including the special
measure proposed in FinCEN's May 2025 NPRM.
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a. Huione Group
Huione Group is a Cambodia based, Hong Kong-registered,\28\ sole
proprietorship founded in or around 2014, that appears to be owned and
controlled by an individual Cambodian national,\29\ and at times holds
itself out as the parent entity of the Components.\30\ By its own
account, Huione Group began as a fiat currency exchange service and
over the past decade, expanded its commercial interests to include
finance, insurance, real estate entities,\31\ and most recently, CVC
exchange services.\32\ The Components operate in an interconnected
fashion to provide an integrated payment service provider, illicit
online market, and CVC exchanger (a type of virtual asset service
provider or VASP).
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\28\ Hong Kong Companies Registry, Huione Group Limited, at p.
54, <a href="https://www.cr.gov.hk/docs/wrpt/RNC063_2018.12.17-2018.12.23.pdf">https://www.cr.gov.hk/docs/wrpt/RNC063_2018.12.17-2018.12.23.pdf</a>.
\29\ See The Record, Tether freezes $29 million of
cryptocurrency connected to Cambodian marketplace accused of fueling
scams (July 15, 2024), <a href="https://therecord.media/tether-freezes-29-million-crypto-connected-to-scam-marketplace">https://therecord.media/tether-freezes-29-million-crypto-connected-to-scam-marketplace</a>.
\30\ See, e.g., Elliptic, Huione: The Company Behind the Largest
Ever Illicit Online Marketplace Has Launched a Stablecoin (Jan. 14,
2025), <a href="https://www.elliptic.co/blog/huione-largest-ever-illicit-online-marketplace-stablecoin">https://www.elliptic.co/blog/huione-largest-ever-illicit-online-marketplace-stablecoin</a>; Elliptic, Huione Guarantee: The
multi-billion dollar marketplace used by online scammers (July 9,
2024, updated Mar. 27, 2025), <a href="https://www.elliptic.co/blog/cyber-scam-marketplace">https://www.elliptic.co/blog/cyber-scam-marketplace</a>; Chainalysis, 2024 Crypto Crime Mid-year Update
Part 2: China-based CSAM and Cybercrime Networks on the Rise, Pig
Butchering Scams Remain Lucrative (Aug. 29, 2024), <a href="https://www.chainalysis.com/blog/2024-crypto-crime-mid-year-update-part-2/">https://www.chainalysis.com/blog/2024-crypto-crime-mid-year-update-part-2/</a>;
ABC News, Cambodian online marketplace outed as one-stop shop for
scammers' money laundering and `detention equipment' needs (July 26,
2024), <a href="https://www.abc.net.au/news/2024-07-27/online-marketplace-for-money-laundering-and-scammers/104131624">https://www.abc.net.au/news/2024-07-27/online-marketplace-for-money-laundering-and-scammers/104131624</a>; Huione Crypto, Terms
and Conditions, formerly available at <a href="https://www.huione.io/en-US/termsAndConditions/userAgreement">https://www.huione.io/en-US/termsAndConditions/userAgreement</a> (last accessed Mar. 27, 2025). The
Huione Group website is no longer accessible, which FinCEN assesses
is likely a response to negative public attention following a series
of reports by blockchain analytic firms on money laundering
occurring at Huione Group.
\31\ Huione Group, Who We Are, formerly available at <a href="https://www.huione.com/html/about.jsp">https://www.huione.com/html/about.jsp</a> (last accessed Sept. 24, 2024).
\32\ Huione Crypto, Introduce, formerly available at <a href="https://www.huione.io/en-US/introduce">https://www.huione.io/en-US/introduce</a> (last accessed Mar. 26, 2025).
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Huione Group, as an individual entity, coordinates the Components'
activities by operating the customer service and public relations
functions of
[[Page 48298]]
the Huione Group. Huione Group historically does this by hosting
Telegram channels \33\ to aid customers experiencing problems with the
services that the Components provide.\34\ One of Huione Group's
Telegram channels also provides public relations commentary on behalf
of the whole of the Huione Group network. On March 9, 2025, that public
relations channel responded to counter news media reports that the
Cambodian government revoked Huione Pay PLC's banking license.\35\
Through coordination by Huione Group, Huione Group's Components all
share CVC infrastructure, making it challenging to ascertain the
specific Component involved in a particular transaction.
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\33\ Following the issuance of the NPRM, Telegram blocked Huione
Group's telegram channels, which Haowang Guarantee notified
customers of on its website. Haowang Guarantee, Announcements,
formerly available at <a href="https://www.hwbd.la/announcement">https://www.hwbd.la/announcement</a> (last
accessed May 15, 2025).
\34\ Telegram, Huione Group Customer Service Center, formerly
available at <a href="https://t.me/huionekf/138">https://t.me/huionekf/138</a> (last accessed Mar. 27,
2025).
\35\ Telegram, Huione Group Customer Service, Huione Statement
(Mar. 9, 2025), formerly available at <a href="https://t.me/huionekf/346">https://t.me/huionekf/346</a>.
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FinCEN finds that reasonable grounds exist to conclude that Huione
Group is a money transmitter. By providing customer service and public
relations services on behalf of the Components, Huione Group is itself
part of a network of people who engage as a business in facilitating
the transfer of money. Furthermore, through Huione Group's apparent
control of the Components (each of which is itself a money transmitter
and responds to Huione Group's coordination of the Components' business
activities such that they form a self-contained ecosystem of exchange,
payment, and market services), Huione Group is engaged as a business in
the transmission of value that substitutes for currency. Accordingly,
FinCEN finds that reasonable grounds exist to conclude that Huione
Group is a financial institution as defined by the BSA and as that term
is used in section 311.
b. Haowang Guarantee (Formerly Huione Guarantee)
Haowang Guarantee described itself as ``a professional e-commerce
platform that provides users with virtual digital products and
transaction services . . . [that] does not participate in nor
understand the specific business of the customer. . . . Huione cannot
verify or guarantee the process of funds or goods.'' \36\ On October
19, 2024, Huione Guarantee was rebranded as Haowang Guarantee,
announcing the change on September 30, 2024, and offering customer
discount following the rebrand to thank its long-term customers.\37\
The reason for the Haowang Guarantee rebrand is unclear, although
FinCEN assesses that it could be to distance itself from the negative
public reporting about Huione Group.\38\
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\36\ Haowang Guarantee, About, formerly available at <a href="https://www.hwbd.la/about">https://www.hwbd.la/about</a> (last accessed July 28, 2025).
\37\ Telegram, Haowang Guarantee Customer Service Channel (Sept.
30, 2024), formerly available at <a href="https://t.me/s/kefu">https://t.me/s/kefu</a> (last accessed
Mar. 27, 2025).
\38\ See supra note 30.
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Multiple blockchain analytic firms have analyzed and reported on
Haowang Guarantee for facilitating the sale of contraband and illicit
services. For example, a public report issued by blockchain analytics
company Elliptic found that Haowang Guarantee appears to operate in a
manner similar to a darknet market.\39\ This assessment is based on the
fact that Haowang Guarantee offers a marketplace where third party
merchants can sell goods and services, including money laundering
services and equipment that can be used to detain people, which could
be used for illicit purposes such as human trafficking.\40\ While
FinCEN does not have evidence that Haowang Guarantee operates on the
darknet, FinCEN assesses that Haowang Guarantee deals in the sale of
illicit goods and services in a manner similar to a darknet market but
on the open internet.\41\
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\39\ Darknet Markets almost exclusively accept CVC as payment
for a large range of illegal services and goods, including
ransomware-as-a-service (RaaS). CVC is often the payment method of
choice on darknet marketplaces because illicit actors who transact
on the darknet often incorrectly believe virtual currencies to be an
anonymous and untraceable means of exchange.
\40\ Elliptic, Huione Guarantee: The multi-billion dollar
marketplace used by online scammers (July 9, 2024, updated Mar. 27,
2025), <a href="https://www.elliptic.co/blog/cyber-scam-marketplace">https://www.elliptic.co/blog/cyber-scam-marketplace</a>.
\41\ For example, Haowang Guarantee has many similar
characteristics to the darknet market described here See Department
of the Treasury, Press Release, Treasury Sanctions Russia-Based
Hydra, World's Largest Darknet Market, and Ransomware-Enabling
Virtual Currency Exchange Garantex (Apr. 5, 2022), <a href="https://home.treasury.gov/news/press-releases/jy0701">https://home.treasury.gov/news/press-releases/jy0701</a>.
---------------------------------------------------------------------------
Chainalysis, a separate blockchain analytics company, found similar
results. In its 2024 Crypto Crime Mid-Year Update Report, it determined
that Haowang Guarantee operates as a peer-to-peer marketplace that
connects buyers and sellers and facilitates transactions.\42\
Chainalysis reviewed blockchain data of Haowang Guarantee and
determined it had processed at least USD 49 billion worth of CVC since
2021. Chainalysis also determined that merchants operating on Haowang
Guarantee's marketplace offered various illicit services, including the
technology, infrastructure, and resources to conduct cyber scams.\43\
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\42\ Chainalysis, 2024 Crypto Crime Mid-year Update Part 2:
China-based CSAM and Cybercrime Networks on the Rise, Pig Butchering
Scams Remain Lucrative (Aug. 29, 2024), <a href="https://www.chainalysis.com/blog/2024-crypto-crime-mid-year-update-part-2/">https://www.chainalysis.com/blog/2024-crypto-crime-mid-year-update-part-2/</a>.
\43\ Id.
---------------------------------------------------------------------------
In addition, Elliptic reports that Haowang Guarantee provides money
laundering services to criminal organizations, helping them transfer
the proceeds of investment frauds and other cyber scams to the
legitimate banking sector undetected.\44\ Because Haowang Guarantee
offers ``virtual digital products and transaction services'' and
facilitates CVC transactions, FinCEN finds that there are reasonable
grounds to conclude that it is engaged as a business in the
transmission of value that substitutes for currency. Accordingly,
FinCEN finds that reasonable grounds exist to conclude that Haowang
Guarantee is a financial institution as that term is used in the BSA
and section 311.
---------------------------------------------------------------------------
\44\ Elliptic, Huione: The Company Behind the Largest Ever
Illicit Online Marketplace Has Launched a Stablecoin (Jan. 14,
2025), <a href="https://www.elliptic.co/blog/huione-largest-ever-illicit-online-marketplace-stablecoin">https://www.elliptic.co/blog/huione-largest-ever-illicit-online-marketplace-stablecoin</a>.
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c. Huione Pay PLC
As of January 2025, Huione Pay PLC was registered as a payment
services institution with the National Bank of Cambodia.\45\ On March
6, 2025, a media report indicated that Huione Pay PLC's banking license
was revoked by the Cambodian government.\46\ According to a July 31,
2025 update, the National Bank of Cambodia rescinded this license
[[Page 48299]]
by updating its list of ``Payment Service Institutions.'' \47\ Further,
as of March 2025, Huione Pay PLC was registered with the Cambodian
Ministry of Commerce for ``other financial service activities,''
however, as of July 29, 2025, it no longer appears in the Ministry of
Commerce's business registration database, indicating that Huione Pay
PLC lacks an active corporate registration or payment service
license.\48\ Until December 2023, there was a likely related entity,
``Huione Pay,'' registered as a money services business in Canada,
which was incorporated in the country as Huione Pay Inc.\49\ In March
2025, Huione Group advertised its plans to expand Huione Pay PLC into
new markets, including in North America.\50\
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\45\ National Bank of Cambodia, List of Payment Service
Institutions (Dec. 31, 2024), <a href="https://www.nbc.gov.kh/english/supervision/payment_service.php">https://www.nbc.gov.kh/english/supervision/payment_service.php</a> (last accessed Mar. 21, 2025). The
National Bank of Cambodia's List of Payment Service available on its
website only reflects the most recent reporting period. As such, the
information presented by FinCEN reflects information that was
available at the time indicated, in this example, the above
mentioned information indicates that as of March 21, 2025, Huione
Pay PLC was registered as a payment service institution. Future
references to this list correspondingly indicate the information as
it was available on the date indicated.
\46\ See Radio Free Asia, Exclusive: World's Largest online
black market' Loses banking license (Mar. 6, 2025), <a href="https://www.rfa.org/english/cambodia/2025/">https://www.rfa.org/english/cambodia/2025/</a> 03/06/huione-cambodia-cyberscam-
cryptocurrency/. Huione Group responded to the allegations, refuting
them by noting that Huione Pay PLC does not require a banking
license for its operations. Telegram, Huione Group Customer Service,
Huione Statement (Mar. 9, 2025), formerly available at <a href="https://t.me/huionekf/346">https://t.me/huionekf/346</a>. As of March 31, 2025, Huione Pay PLC is no longer
listed as having an active license for ``other financial services
activities.'' National Bank of Cambodia, List of Payment Service
Institutions (Mar. 31, 2025), <a href="https://www.nbc.gov.kh/english/supervision/payment_service.php">https://www.nbc.gov.kh/english/supervision/payment_service.php</a> (last accessed May 14, 2025).
\47\ National Bank of Cambodia, List of Payment Service
Institutions (July 31, 2025), <a href="https://www.nbc.gov.kh/english/supervision/payment_service.php">https://www.nbc.gov.kh/english/supervision/payment_service.php</a> (last accessed Oct. 7, 2025).
\48\ Cambodia Corporate Registry, Huione Search, <a href="https://www.businessregistration.moc.gov.kh/cambodia-master/service/create.html?targetAppCode=cambodia-master&targetRegisterAppCode=cambodia-br-companies&service=registerItemSearch">https://www.businessregistration.moc.gov.kh/cambodia-master/service/create.html?targetAppCode=cambodia-master&targetRegisterAppCode=cambodia-br-companies&service=registerItemSearch</a> (last accessed Mar. 27, 2025;
July 29, 2025).
\49\ Financial Transactions and Reports Analysis Centre of
Canada (FINTRAC), Money Services Business Registry, Huione Pay Inc,
<a href="https://fintrac-canafe.canada.ca/msb-esm/reg-eng">https://fintrac-canafe.canada.ca/msb-esm/reg-eng</a> (last accessed Mar.
13, 2025).
\50\ Telegram, Huione Group Customer Service, Huione Statement
(Mar. 9, 2025), formerly available at <a href="https://t.me/huionekf/346">https://t.me/huionekf/346</a>.
---------------------------------------------------------------------------
Huione Pay PLC offers its customers the ability to trade CVC on
different blockchains, and to convert CVC to or from various fiat
currencies; however, as of July 30, 2025, the Huione Pay PLC website
was inaccessible.\51\ Part of Huione Pay PLC, Huione International
Payments, acts as a merchant on Haowang Guarantee's platform,
exchanging CVC to facilitate the transfer of the proceeds of cyber
scams.\52\ Huione Pay PLC previously held the local equivalent of a
money transmitting business license issued by the Kingdom of Cambodia
and engages in the exchange of CVC in a manner consistent with the
definition of a money transmitting business.\53\ Accordingly, FinCEN
finds that reasonable grounds exist to conclude that Huione Pay PLC is
a financial institution as that term is used in the BSA and section
311.
---------------------------------------------------------------------------
\51\ Huione Pay website, Index, formerly available at <a href="https://www.huionepay.com.kh/index/help">https://www.huionepay.com.kh/index/help</a> (last accessed Mar. 27, 2025).
\52\ FinCEN assesses that Huione International Payments is part
of Huione Pay PLC and that the entity supports Haowang Guarantee's
facilitation of transactions connected to money laundering
activities. See Elliptic, Huione Guarantee: The multi-billion dollar
marketplace used by online scammers (July 9, 2024, updated Mar. 27,
2025), <a href="https://www.elliptic.co/blog/cyber-scam-marketplace">https://www.elliptic.co/blog/cyber-scam-marketplace</a>; The New
York Times, How Scammers Launder Money and Get Away With It (Mar.
23, 2025), <a href="https://www.nytimes.com/2025/03/23/world/asia/cambodia-money-laundering-huione.html">https://www.nytimes.com/2025/03/23/world/asia/cambodia-money-laundering-huione.html</a>.
\53\ National Bank of Cambodia, List of Payment Service
Institutions (Dec. 31, 2024), <a href="https://www.nbc.gov.kh/english/supervision/payment_service.php">https://www.nbc.gov.kh/english/supervision/payment_service.php</a> (last accessed Mar. 21, 2025).
---------------------------------------------------------------------------
d. Huione Crypto
Huione Crypto provides CVC trading services through its ``Huione
Exchange'' brand, which it owns and operates. Huione Exchange provides
a platform for its customers to trade CVC using either its ``peer to
peer'' or ``centrali[z]ed exchange platform.'' \54\ In other words,
Huione Crypto is a VASP operating under the Huione Group umbrella, and
other Huione Group entities use Huione Crypto's infrastructure to
engage in CVC transactions. Separately, Huione Crypto issues the USDH
stablecoin.\55\ By facilitating CVC value exchanges for its customers
through its trading platform, and by issuing a stablecoin that
facilitates the transfer of money outside the conventional financial
institution systems, Huione Crypto is engaged in money transmission as
described at 31 U.S.C. 5312(a)(2)(R). Accordingly, FinCEN finds that
reasonable grounds exist to conclude that Huione Crypto is a financial
institution as that term is used in the BSA and section 311.
---------------------------------------------------------------------------
\54\ Huione Crypto, Legal, formerly available at <a href="https://www.huione.io/en-US/termsAndConditions/userAgreement">https://www.huione.io/en-US/termsAndConditions/userAgreement</a> (last accessed
Mar. 27, 2025).
\55\ See Section I.B.
---------------------------------------------------------------------------
2. Huione Group and Its Identified Components Operate Outside the
United States
As in the NPRM, FinCEN finds that reasonable grounds exist for
concluding that Huione Group is a foreign financial institution.\56\ As
described in section II.A.1, Huione Group is a financial services
conglomerate based in Phnom Penh, Cambodia, and its network offers
unique services ranging from an online marketplace selling items useful
for carrying out cyber scams to money laundering services that accept
both fiat currencies and CVC.
---------------------------------------------------------------------------
\56\ FinCEN, Special Measure Regarding Huione Group, as a
Foreign Financial Institution of Primary Money Laundering Concern,
90 FR 18934 (May 5, 2025).
---------------------------------------------------------------------------
a. Huione Group
Based on publicly available information, Huione Group is operated
by a Cambodian person, from Phnom Penh, Cambodia.\57\ Furthermore, the
Huione Group website is registered to a Cambodian address in Phnom
Penh, uses a Cambodian Top-Level Domain, and communicates predominately
in the Chinese language via a Cambodian website and one or more
Telegram channels operated from Cambodia.\58\ Accordingly, FinCEN finds
that reasonable grounds exist to conclude that Huione Group is operated
from and located in Cambodia and thus operates outside of the United
States.
---------------------------------------------------------------------------
\57\ The Record, Tether freezes $29 million of cryptocurrency
connected to Cambodian marketplace accused of fueling scams (July
15, 2024), <a href="https://therecord.media/tether-freezes-29-million-crypto-connected-to-scam-marketplace">https://therecord.media/tether-freezes-29-million-crypto-connected-to-scam-marketplace</a>; see also ICANN, <a href="http://Huione.com">Huione.com</a>, <a href="https://lookup.icann.org/en/huione.com">https://lookup.icann.org/en/huione.com</a>; Elliptic, Huione Guarantee: The
multi-billion dollar marketplace used by online scammers (July 9,
2024, updated Mar. 27, 2025), <a href="https://www.elliptic.co/blog/cyber-scam-marketplace">https://www.elliptic.co/blog/cyber-scam-marketplace</a>.
\58\ On May 13, 2025, Telegram shut down Huione Group's Telegram
channel, however, there is evidence that Huione Group is creating
new channels under different names to circumvent the action taken by
Telegram.
---------------------------------------------------------------------------
b. Haowang Guarantee (Formerly Huione Guarantee)
Haowang Guarantee has operated a Telegram-based marketplace that
allows its customers to buy and sell goods and services, relying on
other Huione Group services and infrastructure to execute the
exchanges. FinCEN assesses that Haowang Guarantee deliberately
obfuscates its location to shield its enterprise and customers from law
enforcement. However, Haowang Guarantee is integrated into Huione
Group's operations and is apparently subject to Huione Group's control.
FinCEN assesses that it is operated from Cambodia and Haowang Guarantee
advertises job opportunities based in Phnom Phen, Cambodia.
Accordingly, FinCEN finds that reasonable grounds exist to conclude
that Haowang Guarantee is operated from and located in Cambodia and
thus operates outside of the United States.
c. Huione Pay PLC
Huione Pay PLC operates, or has operated, eight Cambodian domestic
branch locations, located in Battambang, Phnom Penh, Poipet, Siem Reap,
and Sihanoukville.\59\ Huione Pay PLC has advertised on social media
that it has, or had, operated a branch in Laukkaing,\60\ the capital of
the Kokang Self-Administered Zone in northern Burma and a known center
for criminal CVC investment scams, before a 2023-2024 crackdown
shuttered the majority of these operations.\61\ As noted above,
[[Page 48300]]
Huione Pay PLC held a corporate registration in Cambodia as well as a
payment services institution license, both of which have been revoked
as of March 2025.\62\ Based on the foregoing, FinCEN finds that
reasonable grounds exist to conclude that Huione Pay PLC is operated
from and located in Cambodia, and thus operates outside of the United
States.
---------------------------------------------------------------------------
\59\ Telegram, Huione Branch, formerly available at <a href="https://t.me/huionestoreaddress/7">https://t.me/huionestoreaddress/7</a> (last accessed Mar. 27, 2025).
\60\ Telegram, Huione Group Customer Service Center, formerly
available at <a href="https://t.me/huionekf/138">https://t.me/huionekf/138</a> (last accessed Mar. 27,
2025).
\61\ Recorded Future, Myanmar rebels take control of `pig
butchering' scam city amid China pressure on junta (Jan. 8, 2024),
<a href="https://therecord.media/myanmar-rebels-control-pig-butchering-scam-hub">https://therecord.media/myanmar-rebels-control-pig-butchering-scam-hub</a>.
\62\ National Bank of Cambodia, List of Payment Service
Institutions (Dec. 31, 2024), <a href="https://www.nbc.gov.kh/english/supervision/payment_service.php">https://www.nbc.gov.kh/english/supervision/payment_service.php</a> (last accessed Mar. 21, 2025); As of
March 31, 2025, Huione Pay PLC is no longer listed as having an
active license for ``other financial services activities.'' National
Bank of Cambodia, List of Payment Service Institutions (Mar. 31,
2025), <a href="https://www.nbc.gov.kh/english/supervision/payment_service.php">https://www.nbc.gov.kh/english/supervision/payment_service.php</a> (last accessed Oct 7, 2025); As of July 30,
2025, Huione Pay PLC has also lost its corporate registration. See
Cambodia Corporate Registry, Huione Search, <a href="https://www.businessregistration.moc.gov.kh/cambodia-master/service/create.html?targetAppCode=cambodia-master&targetRegisterAppCode=cambodia-br-companies&service=registerItemSearch">https://www.businessregistration.moc.gov.kh/cambodia-master/service/create.html?targetAppCode=cambodia-master&targetRegisterAppCode=cambodia-br-companies&service=registerItemSearch</a> (last accessed July 29, 2025).
---------------------------------------------------------------------------
d. Huione Crypto
Huione Crypto is registered in Poland under the name Huione Crypto
Sp[oacute][lstrok]ka Z Ograniczon[aogon]
Odpowiedzialno[sacute]ci[aogon] \63\ and is also registered as a Money
Services Business (MSB) \64\ with FinCEN. However, despite its
registration in Poland and the United States, FinCEN assesses that
Huione Crypto actually operates in and from Cambodia,\65\ and FinCEN
has found no evidence consistent with activity in the United
States.\66\ FinCEN assesses that the ``Group'' referenced in Huione
Crypto's previously used Standard Terms and Conditions, which does not
appear on its new website (www.huione.me),\67\ refers to Huione Group,
and that Huione Crypto's CVC services share infrastructure with Huione
Pay PLC and Haowang Guarantee, and collectively comprise a single
organization.
---------------------------------------------------------------------------
\63\ Polish corporate registration database, Huione Crypto
SP[Oacute][Lstrok]KA Z OGRANICZON[Aogon]
ODPOWIEDZIALNO[Sacute]CI[Aogon], <a href="https://www.biznes.gov.pl/en/wyszukiwarka-firm/wpis/krs/0001043802">https://www.biznes.gov.pl/en/wyszukiwarka-firm/wpis/krs/0001043802</a> (last accessed Oct. 6, 2025).
\64\ For more information on what type of business or activity
requires registration as a money service business, see FinCEN, Money
Services Business Definition, <a href="https://www.fincen.gov/money-services-business-definition">https://www.fincen.gov/money-services-business-definition</a>. See also 31 CFR 1010.100(ff).
\65\ Huione Crypto, Career Opportunities, formerly available at
<a href="https://Huione.io/en-US/careerOpportunities">https://Huione.io/en-US/careerOpportunities</a> (last accessed Mar. 27,
2025); Huione Crypto, Legal, formerly available at <a href="https://www.huione.io/en-US/termsAndConditions/userAgreement">https://www.huione.io/en-US/termsAndConditions/userAgreement</a> (last accessed
Mar. 27, 2025); Huione Pay PLC, formerly available at
<a href="http://www.huionepay.com">www.huionepay.com</a>.kh (last accessed Mar. 27, 2025).
\66\ See FinCEN, MSB Registrant Search, Huione, <a href="https://www.fincen.gov/msb-state-selector">https://www.fincen.gov/msb-state-selector</a>.
\67\ Huione Crypto website, www.huione.me/home?ts=1755613352122
(last accessed Aug. 19, 2025).
---------------------------------------------------------------------------
Huione Crypto advertises jobs in Phnom Penh, Cambodia indicating it
is likely operated out of Cambodia, instead of Poland. Additionally,
the Standard Terms and Conditions of Huione Crypto stated that the
``Group provides the Services through <a href="http://www.7572.com">www.7572.com</a>, the Group's mobile
application or any Huione application programming interface.'' The
listed web page (<a href="http://www.7572.com">www.7572.com</a>) formerly, but no longer, redirects to
the website of Huione Pay PLC (<a href="http://www.huionepay.com">www.huionepay.com</a>.kh), however, as of
August 19, 2025, it appears to be a website used exclusively by Huione
Pay PLC. Indeed, Huione Crypto's user agreement expressly disclaims
that persons inside the United States may not avail themselves of
Huione Group's services.\68\ Accordingly, FinCEN finds that reasonable
grounds exist to conclude that Huione Crypto is operated from and
located in Cambodia and thus operates outside of the United States.
---------------------------------------------------------------------------
\68\ Huione Crypto, Legal, formerly available at <a href="https://www.huione.io/en-US/termsAndConditions/userAgreement">https://www.huione.io/en-US/termsAndConditions/userAgreement</a> (last accessed
Mar. 27, 2025).
---------------------------------------------------------------------------
e. Huione Group's Connections to the United States
The most evidence of activity in the United States by Huione Group
or its individual Components are three MSB registrations \69\ with
FinCEN and an address reported on two registrations.\70\ In April 2023,
Huione Crypto registered as a dealer in foreign exchange, and provided
a business address in Phnom Penh, Cambodia, while noting no branches in
the United States. In August 2024, Huione Pay Inc. registered to
conduct multiple MSB activities, including check cashing, dealing in
foreign exchange, and money transmission. Huione Pay Inc. provided an
address in Denver, Colorado associated with a virtual mail forwarding
service, and it also noted no branches in the United States. Finally,
in February 2025, Huione LTD registered as a dealer in foreign
exchange, money transmitter, and seller of money orders, and noted no
branches in the United States. Huione LTD appears to use the same
Denver, Colorado mail forwarding service as Huione Pay Inc. FinCEN has
not identified any actual physical location or other information
suggesting Huione Group or the Components are operating in the United
States.
---------------------------------------------------------------------------
\69\ FinCEN's MSB Registrant Search web page reflects only what
the registrant has provided to FinCEN, and FinCEN does not approve
or endorse any business that has registered as an MSB.
\70\ An examiner attempted to contact Huione Pay Inc. at the
Denver, Colorado location in November 2024, but the examiner did not
identify a Huione Pay Inc. representative, nor any other evidence of
a physical presence by Huione Pay Inc.
---------------------------------------------------------------------------
Based on the foregoing, FinCEN assesses that Huione Group,
including the Components, are predominately operated from and located
in Cambodia, with a limited connection to Poland where Huione Crypto
holds a corporate registration. While the three MSB registrations by
Huione Crypto, Huione Pay Inc., and Huione LTD suggest that Huione
Group may intend to expand its business to the United States in the
future, as of the date of this final rule, FinCEN is not aware of any
physical presence by Huione Group or the Components in the United
States, or any substantial business with customers in the United
States. Accordingly, FinCEN finds that there are reasonable grounds to
conclude that Huione Group, including the Components, are foreign
financial institutions that operate outside the United States.
3. Huione Group and Its Identified Components Are of Primary Money
Laundering Concern
FinCEN assesses that Huione Group is used to facilitate and promote
money laundering, particularly in support of illicit financial
activities connected to the Democratic People's Republic of Korea
(DPRK) and Southeast Asia-based TCOs. Because Huione Group has shared
infrastructure with its constituent entities, the structure makes it
challenging to ascertain the specific Component involved in any
particular transaction. Nevertheless, FinCEN bases this assessment on
information available through both public and non-public reporting, and
after thorough consideration of each of the following factors: (1)
Huione Group provides services that DPRK government entities use to
launder the proceeds of cyber heists; (2) TCOs based in Southeast Asia
have used Huione Group to launder illicit proceeds of cyber scams,
including CVC investment scams; and (3) Huione Group operates an
illicit online market.
a. Huione Group Facilitates Transactions for DPRK Actors To Launder
Funds From Sanctions Evasion and Cyber Heists
DPRK-affiliated actors have extensively used the Huione Group to
launder stolen CVC for the benefit of the DPRK government and in
support of DPRK's WMD and ballistic missile programs, in violation of
U.S. and multilateral sanctions programs, including United Nation
Security Council Resolutions (UNSCRs). The
[[Page 48301]]
United States has consistently taken measures to counter DPRK's abuse
of CVC and protect the United States from DPRK's illicit financial
activity.\71\ However, as outlined in Treasury's 2024 National
Proliferation Financing Risk Assessment, DPRK has continued to advance
its illicit exploitation of new financial technology, including the
theft and laundering of CVC, to raise and move money to fund its
illicit weapons programs.\72\ Indeed, the UNSCR 1718 Committee's Panel
of Experts (UNSCR 1718 POE) found that the malicious cyber activities
of the DPRK generates approximately 50 percent of its foreign currency
income. In its March 2024 annual report, the UNSCR 1718 POE indicated
that it was investigating 17 CVC heists in 2023 for which the DPRK may
be responsible, valued at more than USD 750 million.\73\
---------------------------------------------------------------------------
\71\ See FinCEN, READOUT: FinCEN Hosts Public-Private Dialogue
on Countering the DPRK's Illicit Cyber Activities (Aug. 31, 2023),
<a href="https://www.fincen.gov/news/news-releases/readout-fincen-hosts-public-private-dialogue-countering-dprks-illicit-cyber">https://www.fincen.gov/news/news-releases/readout-fincen-hosts-public-private-dialogue-countering-dprks-illicit-cyber</a>.
\72\ Department of the Treasury, National Proliferation
Financing Risk Assessment (Feb. 7, 2024), at pp. 2, 18, <a href="https://home.treasury.gov/system/files/136/2024-National-Proliferation-Financing-Risk-Assessment.pdf">https://home.treasury.gov/system/files/136/2024-National-Proliferation-Financing-Risk-Assessment.pdf</a>.
\73\ United Nations, S/2024/215, UN Panel of Experts Letter
(Mar. 7, 2024), at p. 60, <a href="https://documents.un.org/doc/undoc/gen/n24/032/68/pdf/n2403268.pdf">https://documents.un.org/doc/undoc/gen/n24/032/68/pdf/n2403268.pdf</a>.
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i. Background on DPRK CVC Heists
In the same March 2024 report, the UNSCR 1718 POE noted it was
investigating 58 suspected cyberattacks by DPRK's Reconnaissance
General Bureau (RGB),\74\ to which the Lazarus Group \75\ is related,
on CVC companies between 2017 and 2023, valued at approximately USD 3
billion. FinCEN assesses that these funds likely bolstered DPRK's WMD
development.\76\ The Federal Bureau of Investigation (FBI), the
Cybersecurity and Infrastructure Security Agency (CISA), and Treasury
issued a joint Cybersecurity Advisory to highlight the cyber threat
associated with cryptocurrency thefts and tactics used by the DPRK
state-sponsored advanced persistent threat group, since at least
2020.\77\ The U.S. government has observed DPRK cyber actors targeting
a variety of organizations in the blockchain technology and
cryptocurrency industry, including cryptocurrency exchanges,
decentralized finance protocols, play-to-earn CVC video games, CVC
trading companies, venture capital funds investing in CVC, and
individual holders of large amounts of cryptocurrency or valuable non-
fungible tokens.\78\ FinCEN assesses that, over time, the DPRK's money
laundering processes have become more complex in order to evade OFAC
sanctions, law enforcement, and BSA reporting obligations from hacked
entities or CVC entities used in the laundering process. DPRK is
leveraging sophisticated CVC methods and a range of intermediary
entities, often operating across multiple jurisdictions in East Asia,
to further obfuscate its laundering. In fact, in August 2023, the FBI
alerted the public to several thefts from CVC companies that it
attributed to the Lazarus Group and warned that there could be another
USD 40 million worth of CVC being prepared for laundering through
VASPs.\79\
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\74\ On January 2, 2015, OFAC sanctioned DPRK's RGB for being a
controlled entity of the Government of North Korea. See Department
of the Treasury, Press Release, Treasury Imposes Sanctions Against
the Government of The Democratic People's Republic Of Korea (Jan. 2,
2015), <a href="https://home.treasury.gov/news/press-releases/jl9733">https://home.treasury.gov/news/press-releases/jl9733</a>. RGB was
also previously listed in the annex to E.O. 13551 on August 30,
2010. Executive Order 13551, ``Blocking Property of Certain Persons
With Respect to North Korea,'' 75 FR 53837 (Aug. 30, 2010).
\75\ This group is commonly referred to by the cybersecurity
industry as Lazarus Group, APT38, BlueNoroff, and Stardust Chollima.
For the purposes of this final rule, FinCEN will refer to this group
as Lazarus Group. See Department of the Treasury, Press Release,
Treasury Sanctions North Korean State-Sponsored Malicious Cyber
Group (Sept. 13, 2019), <a href="https://home.treasury.gov/news/press-releases/sm774">https://home.treasury.gov/news/press-releases/sm774</a>.
\76\ Department of the Treasury, Press Release, Treasury Imposes
Sanctions Against the Government of The Democratic People's Republic
Of Korea (Jan. 2, 2015), <a href="https://home.treasury.gov/news/press-releases/jl9733">https://home.treasury.gov/news/press-releases/jl9733</a>.
\77\ Department of the Treasury, Press Release, Treasury
Sanctions North Korean State-Sponsored Malicious Cyber Groups (Sept.
13, 2019), <a href="https://home.treasury.gov/news/press-releases/sm774">https://home.treasury.gov/news/press-releases/sm774</a>.
\78\ CISA, AA22-108A, TraderTraitor: North Korean State-
Sponsored APT Targets Blockchain Companies (Apr. 20, 2022), <a href="https://www.cisa.gov/news-events/cybersecurity-advisories/aa22-108a">https://www.cisa.gov/news-events/cybersecurity-advisories/aa22-108a</a>.
\79\ FBI, FBI Identifies Cryptocurrency Funds Stolen by DPRK
(Aug. 22, 2023), <a href="https://www.fbi.gov/news/press-releases/fbi-identifies-cryptocurrency-funds-stolen-by-dprk">https://www.fbi.gov/news/press-releases/fbi-identifies-cryptocurrency-funds-stolen-by-dprk</a>.
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ii. Huione Group Launders the Proceeds of DPRK Cyber Heists
Despite the 2023 FBI alert and other public reporting, Huione Group
has continued to receive and process these illicit proceeds. There is
wide reporting that Huione Group has received stolen CVC from multiple
heists linked to DPRK actors, namely the Lazarus Group.\80\ For
example, between June 2023 and February 2024, a CVC wallet used by the
Lazarus Group sent CVC valued at over USD 150,000 to Huione Group.\81\
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\80\ The U.S. Government has previously issued advisories to
publicly highlight the Lazarus Group's threat and tactics associated
with CVC theft targeting organizations in the blockchain and CVC
industry. See CISA, AA22-108A, TraderTraitor: North Korean State-
Sponsored APT Targets Blockchain Companies (Apr. 20, 2022), <a href="https://www.cisa.gov/news-events/cybersecurity-advisories/aa22-108a">https://www.cisa.gov/news-events/cybersecurity-advisories/aa22-108a</a>.
\81\ Reuters, Exclusive: North Korean hackers sent stolen crypto
to wallet used by Asian payment firm (July 15, 2024), <a href="https://www.reuters.com/technology/cybersecurity/north-korean-hackers-sent-stolen-crypto-wallet-used-by-asian-payment-firm-2024-07-15/">https://www.reuters.com/technology/cybersecurity/north-korean-hackers-sent-stolen-crypto-wallet-used-by-asian-payment-firm-2024-07-15/</a>.
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FinCEN conducted blockchain analysis, using commercially available
blockchain analytic software, of flows of CVC associated with several
heists carried out by DPRK. This analysis identified that Huione Group
received a combined total of approximately USD 2.6 million worth of CVC
from the June 2, 2023 Atomic Wallet heist and the June 22, 2023
Coinspaid \82\ and Alphapo heists.\83\ In July 2024, Huione Group
received USD 35 million worth of stolen CVC, later attributed to the
Lazarus Group by the FBI, from the May 2024 heist targeting DMM, a
Japanese VASP.\84\ While the DMM heist was not initially attributed to
the Lazarus Group (or any other prohibited entity or jurisdiction), the
heist itself was widely reported by the time Huione Group received the
CVC, and FinCEN would expect covered financial institutions to have an
effective AML/KYC program to appropriately monitor transactions for red
flags indicating connections to a high profile heist such as this. In
total, based on publicly and non-publicly available information
available to FinCEN, FinCEN's analysis has identified that Huione Group
has received at least USD 37.6 million worth of CVC from DPRK cyber
actors stemming from DPRK-attributed heists.
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\82\ FBI, FBI Identifies Cryptocurrency Funds Stolen by DPRK
(Aug. 22, 2023), <a href="https://www.fbi.gov/news/press-releases/fbi-identifies-cryptocurrency-funds-stolen-by-dprk">https://www.fbi.gov/news/press-releases/fbi-identifies-cryptocurrency-funds-stolen-by-dprk</a>.
\83\ Id.
\84\ FBI, FBI, DC3, and NPA Identification of North Korean Cyber
Actors, Tracked as TraderTraitor, Responsible for Theft of $308
Million USD from <a href="http://Bitcoin.DMM.com">Bitcoin.DMM.com</a> (Dec. 23, 2024), <a href="https://www.fbi.gov/news/press-releases/fbi-dc3-and-npa-identification-of-north-korean-cyber-actors-tracked-as-tradertraitor-responsible-for-theft-of-308-million-from-bitcoindmmcom">https://www.fbi.gov/news/press-releases/fbi-dc3-and-npa-identification-of-north-korean-cyber-actors-tracked-as-tradertraitor-responsible-for-theft-of-308-million-from-bitcoindmmcom</a>.
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On multiple occasions between 2022 and 2024, a DPRK national with
deep ties to the RGB, DPRK's primary foreign intelligence organization,
worked with Huione Pay PLC officials to transfer CVC and fiat currency.
FinCEN assesses that senior Huione Pay PLC leadership was aware of the
individual's affiliation with DPRK. This DPRK national maintained
personal relationships with multiple Huione Pay PLC officials and
regularly met in person with at least one of these officials. In late
2023, the DPRK national worked with Huione Pay PLC officials to convert
CVC into fiat currency and subsequently transfer fiat
[[Page 48302]]
currency to an associate. In total, the DPRK national transferred CVC
valued at tens of thousands USD to the Huione Pay PLC official.
Furthermore, based on publicly and non-publicly available information
available to FinCEN, in mid-2023, the DPRK national also planned to
remit USD internationally to Hong Kong and sought Huione Pay PLC
officials help to do so.
Given the opacity of Huione Group and the inherent limitation of
blockchain analytics, FinCEN is largely unable to determine what DPRK-
affiliated actors do with the CVC after they send it to Huione Group.
However, given the close connection between Huione Pay PLC officials
and DPRK nationals with close ties to DPRK's RGB, FinCEN assesses DPRK
most likely uses Huione Group to convert CVC to fiat currencies.
b. Huione Group Launders the Proceeds of Organized Criminal Groups'
Cyber Scams
Huione Group also has significant exposure to, and has facilitated
transactions associated with suspected fraud activity, including CVC
investment scams, also referred to as ``pig-butchering.'' FinCEN
assesses that Huione Group's extensive CVC services and its online
marketplace, Haowang Guarantee, has made Huione Group, a ``one stop
shop'' for criminals to launder CVC obtained through illicit
activities, and ultimately convert it to fiat currency.
i. Background on CVC Investment Scams
In 2023, FinCEN published an alert on the ``Pig Butchering'' CVC
investment scams.\85\ These scams are largely perpetrated by criminal
organizations based in Southeast Asia, who use victims of human
trafficking to conduct outreach to millions of unsuspecting individuals
around the world. The frontline scammers in these schemes are
themselves often victims of trafficking, including forced labor, and
are subjected to physical and mental abuse. The traffickers also force
victims to work up to 15 hours a day and, in some cases, ``resell''
victims to other scam operations or subject them to sex
trafficking.\86\
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\85\ FinCEN, FIN-2023-Alert005, FinCEN Alert on Prevalent
Virtual Currency Investment Scam Commonly Known as ``Pig
Butchering'' (Sept. 8, 2023), <a href="https://www.fincen.gov/sites/default/files/shared/FinCEN_Alert_Pig_Butchering_FINAL_508c.pdf">https://www.fincen.gov/sites/default/files/shared/FinCEN_Alert_Pig_Butchering_FINAL_508c.pdf</a>.
\86\ Department of the Treasury, Press Release, Treasury
Sanctions Cambodian Tycoon and Businesses Linked to Human
Trafficking and Forced Labor in Furtherance of Cyber and Virtual
Currency Scams (Sept. 12, 2024), <a href="https://home.treasury.gov/news/press-releases/jy2576">https://home.treasury.gov/news/press-releases/jy2576</a>.
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Once trust or a relationship has been established, the scammer will
introduce the victim to a supposedly lucrative investment opportunity
in CVC and direct them to use CVC investment websites or applications
designed to appear legitimate, but are instead fraudulent and
ultimately controlled or manipulated by the scammer. When a victim's
pace of investment slows or stops, the scammer will use even more
aggressive tactics to extract any final payments. The scammer may
present the victim with supposed losses on the investment and encourage
them to make up the difference through additional deposits. If the
victim attempts to withdraw their investment, the scammer may demand
that the victim pay purported taxes or early withdrawal fees. Once the
victim is unable or unwilling to pay more into the scam, the scammer
will abruptly cease communication with the victim, taking the victim's
entire investment with them.\87\
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\87\ FinCEN, FIN-2023-Alert005, FinCEN Alert on Prevalent
Virtual Currency Investment Scam Commonly Known as ``Pig
Butchering'' (Sept. 8, 2023), at p. 4, <a href="https://www.fincen.gov/sites/default/files/shared/FinCEN_Alert_Pig_Butchering_FINAL_508c.pdf">https://www.fincen.gov/sites/default/files/shared/FinCEN_Alert_Pig_Butchering_FINAL_508c.pdf</a>.
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ii. Huione Group's Laundering of Proceeds of Cyber Scams, Including CVC
Investment Scams
Based on FinCEN analysis of non-public information, Huione Group
received at least USD 36 million worth of CVC investment scam proceeds,
since at least August 2021. More broadly, the analysis identified that
in the aggregate, inclusive of the cyber scam proceeds, Huione Group
received approximately USD 300 million worth of CVC relating to other
cyber scams. Despite the limitations noted above, and based on publicly
and non-publicly available information, FinCEN assesses that, after
illicit actors send CVC to Huione Group, CVC is then converted to fiat
currency or different CVC, or withdrawn at a later point to move to a
different VASP, as part of the money laundering process.
c. Huione Group's Lax Anti-Money Laundering Policies and Procedures
The risks presented by Huione Group's association with illicit
actors and transactions linked to illicit activity are compounded by
either an absence of, or ineffective, AML/KYC policies and procedures
among Huione Group's components, as well as recent changes that have
served to obfuscate Huione Group's involvement in illicit activity. For
example, in July 2024, Huione Group was the subject of reporting by
several blockchain analytic firms describing the use of its various
services by TCOs for scam activity, including those offered by Haowang
Guarantee.\88\ Elliptic reported that Haowang Guarantee offered scam-
enabling products and services used by scam compound operators to
imprison and torture their workers. The products included tear gas,
electric batons, and electronic shackles, among other related devices.
The same month, in a post to its website in response to the adverse
media reporting, Haowang Guarantee confirmed that ``detention
equipment'' is not necessarily human trafficking.'' \89\ Subsequently,
Huione Pay PLC removed all references to Haowang Guarantee from its
websites.\90\
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\88\ See Chainalysis, 2024 Crypto Crime Mid-year Update Part 2:
China-based CSAM and Cybercrime Networks on the Rise, Pig Butchering
Scams Remain Lucrative (Aug. 29, 2024), <a href="https://www.chainalysis.com/blog/2024-crypto-crime-mid-year-update-part-2/">https://www.chainalysis.com/blog/2024-crypto-crime-mid-year-update-part-2/</a>; Elliptic, Huione:
The Company Behind the Largest Ever Illicit Online Marketplace Has
Launched a Stablecoin (Jan. 14, 2025), <a href="https://www.elliptic.co/blog/huione-largest-ever-illicit-online-marketplace-stablecoin">https://www.elliptic.co/blog/huione-largest-ever-illicit-online-marketplace-stablecoin</a>; Elliptic,
Huione Guarantee: the Multi-billion dollar marketplace used by
online scammers (July 9, 2024), <a href="https://www.elliptic.co/blog/cyber-scam-marketplace">https://www.elliptic.co/blog/cyber-scam-marketplace</a>.
\89\ Haowang Guarantee, To all public friends on social media
(July 17, 2024), formerly available at <a href="https://www.yu444.com/gonggao/detail/2237">https://www.yu444.com/gonggao/detail/2237</a>.
\90\ Elliptic, Huione Guarantee: the Multi-billion dollar
marketplace used by online scammers (July 9, 2024), <a href="https://www.elliptic.co/blog/cyber-scam-marketplace">https://www.elliptic.co/blog/cyber-scam-marketplace</a>.
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Neither Huione Pay PLC nor Haowang Guarantee have published AML/KYC
policies.\91\ Huione Crypto does not have a published AML/KYC policy
either. Rather, it maintains a ``standard terms and conditions'' on its
website governing the use of its services. In relevant part, the
agreement prohibits the use of Huione Crypto's platform by citizens,
nationals or residents of particular countries, including the United
States, Iran or North Korea, as well as individuals sanctioned under
various national regimes, including those of the United States and
United Nations. The agreement also states that ``the [u]ser may not use
the interface or services to disguise the origin or nature of illicit
proceeds.'' \92\ However, the
[[Page 48303]]
extent of the criminal and money laundering activity on Huione Crypto's
platforms that violate its terms and conditions agreement reflects that
its AML/KYC program is either ineffective or unenforced.
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\91\ Repeated searches of their respective websites, including
most recently on July 28, 2025, failed to yield any evidence of a
policy. Haowang Guarantee's website did previously contain cursory
fraud indicators available to customers, which has since been taken
down, likely in response to the NPRM. Regardless, in FinCEN's
assessment, this falls short of reasonable policies and procedures
aimed at combatting money laundering. See Haowang Guarantee,
Fangpian, formerly available at <a href="https://hwdb.la/fangpian">https://hwdb.la/fangpian</a> (last
accessed Mar. 27, 2025).
\92\ Huione Crypto, Legal, formerly available at <a href="https://www.huione.io/en-US/termsAndConditions/userAgreement">https://www.huione.io/en-US/termsAndConditions/userAgreement</a> (last accessed
Mar. 27, 2025).
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Despite this, and as described in greater detail in section II.A.3
since at least August 2021, FinCEN identified--through analysis of non-
public information--that Huione Group received at least USD 37 million
worth of illicit proceeds from sanctioned entities--including DPRK
entities--and at least USD 300 million worth of CVC from various cyber
and CVC scam activity. FinCEN's analysis identified that, in the
aggregate, Huione Group has received at least USD 4 billion worth of
illicit proceeds, between August 2021 and January 2025.\93\ This large-
scale, persistent use of Huione Group by DPRK actors and TCO-driven CVC
investment scams to launder their illicit proceeds belies the adequacy
or effectiveness of Huione Group's AML/KYC procedures.
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\93\ By illicit category, Huione Group has received the
following proceeds in CVC, denominated in equivalent USD value: USD
1,363 from child sexual abuse material; USD 618,861 from Darknet
Markets/Illicit Cyber Vendors; USD 3,246 from FinCEN Primary Money
Laundering Concerns; USD 3,248,510,440 from Identified Illicit Cyber
actors; USD 47,393,602 from VASPs without KYC policies; USD
407,129,792 from OFAC Specially Designated Nationals (U.S.
sanctioned entities); USD 347,549,705 from Scams; USD 22,133,556
from seized and/or stolen funds; and 2,627,009 from terrorist
financing.
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Huione Group itself has conceded the deficiencies in its AML
regime. In a July 2024 media statement, for example, Huione Group
stated ``our [Know Your Customer] capabilities are now seriously
insufficient.'' \94\ This statement was made after previously claiming
earlier that month--in response to public identification of one heist,
the proceeds of which were transmitted to Huione Pay PLC--that it had
not known that Huione Pay PLC ``received funds indirectly'' from the
heist, due to the layers of transactions between the source of the
heist and the Huione Group-owned wallets that ultimately received the
funds.\95\
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\94\ See ABC News, Cambodian online marketplace outed as one-
stop shop for scammers' money laundering and `detention equipment'
needs (July 26, 2024), <a href="https://www.abc.net.au/news/2024-07-27/online-marketplace-for-money-laundering-and-scammers/104131624">https://www.abc.net.au/news/2024-07-27/online-marketplace-for-money-laundering-and-scammers/104131624</a>.
\95\ Reuters, Exclusive: North Korean hackers sent stolen crypto
to wallet used by Asian payment firm (July 15, 2024), <a href="https://www.reuters.com/technology/cybersecurity/north-korean-hackers-sent-stolen-crypto-wallet-used-by-asian-payment-firm-2024-07-15/">https://www.reuters.com/technology/cybersecurity/north-korean-hackers-sent-stolen-crypto-wallet-used-by-asian-payment-firm-2024-07-15/</a>.
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d. Huione Group Continues Its CVC-Related Operations Despite Regulatory
Prohibition
Further illustrating the money laundering risk posed by Huione
Group is the fact that a significant portion of its assessed illicit
transactional activity involves CVC, which the National Bank of
Cambodia, Huione Group's primary regulator, expressly prohibits. In a
2024 public statement, the National Bank of Cambodia stated that
payment firms are ``not allowed to deal or trade any cryptocurrencies
and digital assets. According to that same reporting, this ban has been
in effect since 2018, ``to avoid investment losses due to crypto's
volatility, cybercrime and the anonymity of the technology ``which may
cause risks of money laundering and financing of terrorism.'' '' \96\
Despite this prohibition, Huione Group has continued to develop its CVC
services and has even expanded its CVC offerings in recent months. In
September 2024, Huione Group launched USDH, a stablecoin it explicitly
advertised as ``unfreezable'' and ``not restricted by traditional
regulatory agencies.'' \97\ FinCEN assesses that Huione Group is likely
taking this step and marketing itself as outside regulatory agency
reach to increase its appeal to illicit actors and hamper compliance
with applicable AML laws. Notably, Huione Group's intentional launching
of this ``unfreezable'' stablecoin differs from other stablecoin
issuers that generally respond to law enforcement requests to freeze
CVC tied to illicit activity. One particular example of this contrast
occurred in July 2024, when one stablecoin issuer froze CVC valued at
over USD 29 million that was located in a Huione Group CVC wallet
because it was ``associated with activities allegedly linked to
fraudulent and transnational criminal operations.'' \98\ By trumpeting
that its stablecoin is ``not restricted by traditional regulatory
agencies'' and offering USDH, which is ``unfreezable,'' even upon a
lawful request from law enforcement, Huione Group facilitates and
profits from money laundering, benefiting TCOs and DPRK actors
exfiltrating the proceeds of their crimes.
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\96\ Id.
\97\ Huione Crypto, USDH is a stable currency in one word!,
formerly available at <a href="https://huione.io/en-us/introduce">https://huione.io/en-us/introduce</a> (last
accessed Mar. 27, 2025).
\98\ The Record, Tether freezes $29 million of cryptocurrency
connected to Cambodian marketplace accused of fueling scams (July
15, 2024), <a href="https://therecord.media/tether-freezes-29-million-crypto-connected-to-scam-marketplace">https://therecord.media/tether-freezes-29-million-crypto-connected-to-scam-marketplace</a>.
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Given the various aggravating factors described above, FinCEN finds
that the Huione Group--with its weak and ineffective AML policies,
procedures, and controls, provision of services that offer anonymity
and an ability to evade sanctions, and development of a stablecoin
designed to hinder the ability of law enforcement to recover the
proceeds of crime--is being used extensively to facilitate or promote
money laundering, in particular by organized criminal groups and
entities involved in the proliferation of WMD or missiles.
B. Post-NPRM Developments
In the wake of the NPRM, Huione Group has continued to facilitate
money laundering. For example, a June 16, 2025 media report indicates
that approximately USD 6.9 million worth of CVC stolen from a
compromised device was quickly funneled through one of Huione Group's
Components following the theft.\99\ Analysis by blockchain analytic
firm, Global Ledger found that between May 1 and June 17, 2025,
transactions involving Huione Group wallets amounted to more than USD
10 billion worth of the CVC Tether on Tron,\100\ and USD 219 million
worth of the CVC Ethereum.\101\ Global Ledger's analysis also found
that Huione Crypto and Huione Pay continue to operate under the wider
Huione Group operational structure.\102\ Huione Group's continued
operations point to the challenges of shuttering decentralized, opaque
illicit marketplaces.\103\
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\99\ Cointelegraph, Crypto user loses $6.9 million to a cold
wallet from China's TikTok (June 16, 2025), <a href="https://cointelegraph.com/news/crypto-investor-loses-6m-douyin-cold-wallet-scam">https://cointelegraph.com/news/crypto-investor-loses-6m-douyin-cold-wallet-scam</a>.
\100\ Tether, a stablecoin with a 1:1 peg to the USD, does not
operate its own blockchain, instead, it is issued on the blockchains
of other CVCs, in this case, it is deployed to the Tron blockchain.
For the purposes of this final rule, FinCEN considers Tether on Tron
to be one type of CVC. See Cointelegraph, What Is Tether USDT and
How Does it Work (Feb. 9, 2025) <a href="https://cointelegraph.com/explained/what-is-tether-usdt-and-how-does-it-work">https://cointelegraph.com/explained/what-is-tether-usdt-and-how-does-it-work</a>.
\101\ Cointelegraph, Huione wallets moved $1B to crypto
exchanges since FinCEN action (July 8, 2025), <a href="https://cointelegraph.com/news/huione-wallets-moved-crypto-exchanges-fincen">https://cointelegraph.com/news/huione-wallets-moved-crypto-exchanges-fincen</a>.
\102\ Id.
\103\ Bloomberg, World's Biggest Illicit Marketplace Becomes an
`Amazon for Criminals,' (Aug. 1, 2025) <a href="https://www.bloomberg.com/news/features/2025-08-01/huione-s-24-billion-hub-for-cybercrime-is-an-amazon-for-criminals">https://www.bloomberg.com/news/features/2025-08-01/huione-s-24-billion-hub-for-cybercrime-is-an-amazon-for-criminals</a> (last accessed Aug. 18, 2025); CoinDesk,
Telegram Bans $35B scam Marketplace. Only to see Illicit Crypto
Trades Surge Elsewhere, (July 30, 2025), <a href="https://www.coindesk.com/business/2025/07/30/illicit-crypto-trade-quickly-rebounds-despite-telegram-s-shutdown-of-usd35b-huione-marketplace">https://www.coindesk.com/business/2025/07/30/illicit-crypto-trade-quickly-rebounds-despite-telegram-s-shutdown-of-usd35b-huione-marketplace</a>.
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C. Consideration of Comments
FinCEN published the NPRM, with a 30-day comment period. In
response,
[[Page 48304]]
FinCEN received eight comments.\104\ Those comments are summarized
below, along with FinCEN's responses. One Huione Group component,
Huione Pay PLC, commented on the NPRM through counsel.
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\104\ Published comments are available online at <a href="https://www.regulations.gov/document/FINCEN-2025-0004-0003">https://www.regulations.gov/document/FINCEN-2025-0004-0003</a>.
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1. Huione Pay PLC's Comment and Request for Extension
On May 27, 2025, a law firm (``outside counsel'') representing
Huione Pay PLC emailed FinCEN requesting an extension of the public
comment period so that Huione Pay PLC might provide a fulsome comment
addressing FinCEN's concerns, as outlined in the NPRM. FinCEN granted
that initial request for an extension, providing an additional 14 days
for Huione Pay PLC and any other similarly situated party to submit a
late comment, and outside counsel submitted a comment on June 18, 2025,
which FinCEN posted to <a href="http://regulations.gov">regulations.gov</a>.
In that comment, Huione Pay PLC claims, without evidence or further
explanation, that Huione Pay PLC is an ``independent entity,'' distinct
from Huione Group, presumably seeking to have Huione Pay PLC excluded
from the definition of Huione Group in the proposed rule. However,
Huione Pay PLC had adequate time to identify and produce information
about its own structure and organization--information that a legitimate
enterprise should be willing to produce and have readily at hand.
Having no factual support for the proposition that Huione Pay PLC is
independent of Huione Group, and considering contradictory public and
nonpublic information, FinCEN finds this claim unpersuasive and
continues to assess that Huione Pay PLC is a component of Huione
Group.\105\
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\105\ See supra Sections II.A.1.c, II.A.2.c, and II.A.3.a.ii.
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In its comment, Huione Pay PLC also claims that it is ``undertaking
substantial efforts to address and remediate compliance issues raised
by the Proposed Rulemaking,'' and that it had retained ``an
independent, reputable, U.S.-based, global consulting firm'' in order
``to assist Huione Pay PLC in identifying and remediating potential
compliance deficiencies.'' Huione Pay PLC represented that the firm
would, or had begun to:
<bullet> Speak with Huione Pay PLC staff responsible for various
business functions . . . to understand the company's operations,
management structure, products, and services;
<bullet> Gather information related to the company's compliance
policies, procedures, practices, trainings, and user base; and
<bullet> Examine the company's information technology
infrastructure, databases, controls, and records, and confirm the
technical configurations of the Content Distribution Network (CDN) used
by Huione Pay PLC to enforce the blocking of IP addresses originating
from sanctioned jurisdictions.
In light of the firm's work, the comment sought an additional
unspecified extension of time to submit a late comment in order to
allow for the firm's work to generate additional information, which
would be transmitted to FinCEN. FinCEN considered granting a longer
extension and the benefit of greater insight into Huione Pay PLC's
claims of AML/KYC compliance. However, having already provided Huione
Pay PLC an additional 14 days to submit a comment--resulting in a total
of 44 calendar days to provide substantive comments on the NPRM--FinCEN
declined to grant a further extension of time, taking into account
public and nonpublic information about Huione Pay PLC's deep
integration and essential role in Huione Group's money laundering
activities, Huione Group's consistent pattern of obfuscation in the
face of government action, the volume of money laundering occurring
through Huione Group, the danger of the schemes perpetrated by Huione
Group's criminal customers, FinCEN's past practices relating to public
comment periods,\106\ and the inadequate basis that had been presented
to further delay a final rule in light of the attendant risks.\107\
---------------------------------------------------------------------------
\106\ The Al-Huda Bank NPRM was published on January 31, 2024,
and the final rule was published on July 3, 2024. See FinCEN,
Proposal of Special Measure Regarding Al-Huda Bank, as a Foreign
Financial Institution of Primary Money Laundering Concern, 89 FR
6074 (Jan. 31, 2024); FinCEN, Imposition of Special Measure
Regarding Al-Huda Bank as a Financial Institution of Primary Money
Laundering Concern, 89 FR 55051 (July 3, 2024).
\107\ Since Huione Pay PLC lodged its request, FinCEN has looked
for evidence of action by any Huione Group entity towards AML/KYC
compliance. Except for some superficial restructuring apparently
intended to evade further scrutiny, Huione Group's money laundering
enterprise appears to operate just as before.
---------------------------------------------------------------------------
2. Comment Suggesting That FinCEN Modify Certain Definitions and
Include Provisions To Improve Enforceability
In response to the NPRM, FinCEN received one comment that was
generally supportive of the rule but suggesting that FinCEN modify
certain definitions. That comment suggests that FinCEN adopt a more
comprehensive definition of Huione Group that encompasses any entity
under demonstrable direct or indirect control of Huione Group. FinCEN
weighed the benefit of a more expansive definition of Huione Group with
the benefit of regulatory certainty. FinCEN considered the benefit of a
more flexible and expansive definition of Huione Group in countering
its opaque and evolving organizational structure. However, FinCEN
assessed that the burden on covered financial institutions of a
flexible ``direct or indirect control'' definition would be
considerable and that the probability of misidentification would be
significant. Accordingly, FinCEN determined that final rule should
implement the definition of Huione Group that was proposed in the NPRM.
The same commenter also suggests FinCEN establish a standalone
definition for ``Correspondent Account'' as part of the final rule.
FinCEN assesses that altering such a definition would be beyond the
scope of this rulemaking. The same comment also suggests that FinCEN
include a provision that would cover any successor entity noting that
it should include, ``any attempt to rebrand, restructure, or create
shell companies with the intent to avoid regulatory oversight shall be
considered a violation, subject to immediate enforcement action.''
FinCEN assesses this final rule sufficiently covers entities that
covered financial institutions know or have reason to believe are a
component, branch, or office of Huione Group operating as a financial
institution in any jurisdiction outside of the United States and, as
such, more explicit provisions are unnecessary.
The same commenter also suggests that FinCEN use less subjective
language, including more concise definitions of ``reasonable steps,''
and suggesting that the phrase ``knows or has reason to believe''
leaves too much room for subjective interpretation. FinCEN assesses
that covered financial institutions are best suited to make the
determination of whether they have obligations to implement the special
measure. Similarly, the commenter suggested that ``[t]he proposed
measure does not explicitly detail the consequences for
noncompliance,'' and that ``FinCEN should incorporate language
specifying that violations will trigger enforcement actions, including
fines, account restrictions, or other sanctions as detailed in this
section.'' Willful violations of this final rule are subject to civil
and criminal penalties set forth at 31 CFR 1010.821 and 1010.840, and
31 U.S.C. 5321 and 5322.
[[Page 48305]]
4. Comments Expressing Support for the NPRM, and Suggesting Additional
Steps To Combat CVC Investment Scams
In response to the NPRM, FinCEN received one comment expressing
support for FinCEN's identification of Huione Group as a primary money
laundering concern. The commenter suggests that targeting Huione Group
alone is insufficient to effectively safeguard the U.S. financial
system, and that FinCEN should work with other government agencies to
take additional steps, including punitive measures against other large
facilitators of money laundering. FinCEN assesses that this final rule
is an important step in safeguarding the U.S. financial system and will
continue to take steps to safeguard the U.S. financial system.
5. Non-Responsive Comments
FinCEN received five other comments that were not responsive to the
NPRM, including suggestions to investigate other, unrelated alleged
financial crimes, and separate comments entirely unrelated to this
rulemaking process.
D. Summary of FinCEN's Ongoing Concerns Regarding Huione Group
After considering comments received from the public, as well as
other information available to the agency, including both public and
non-public information, and Huione Group's ongoing efforts to engage in
money laundering activities and evade scrutiny and accountability,
FinCEN continues to find that reasonable grounds exist to conclude that
Huione Group remains a financial institution operating outside the
United States that is of primary money laundering concern.
III. Imposition of a Special Measure Regarding Huione Group as a
Foreign Financial Institution of Primary Money Laundering Concern
Based upon this finding, FinCEN is authorized to impose one or more
special measures. Following the required consultations and the
consideration of all relevant factors discussed in the NPRM, FinCEN
proposed a prohibition under the fifth special measure.\108\
---------------------------------------------------------------------------
\108\ Prior to issuing the NPRM and this final rule, FinCEN
consulted with representatives and staff of the Board of Governors
of the Federal Reserve System, the Office of the Comptroller of the
Currency, the Secretary of State, the staff of the Securities and
Exchange Commission, the Commodity Futures Trading Commission, staff
of the National Credit Union Administration, the Federal Deposit
Insurance Corporation, and the Attorney General. These consultations
involved obtaining interagency views on the imposition of special
measure five and the effects that such a prohibition would have on
the U.S. domestic and international financial systems. Those views
are reflected in FinCEN's explanation of the reasons for issuing
this final rule.
---------------------------------------------------------------------------
After reviewing the comments and considering all potential special
measures, FinCEN concludes that a prohibition under special measure
five is warranted. Consistent with the finding that Huione Group is a
foreign financial institution of primary money laundering concern, and
in consideration of additional relevant factors, this final rule
imposes a prohibition on covered financial institutions from opening or
maintaining a correspondent account for, or on behalf of, Huione Group.
This prohibition will help guard against the money laundering risks to
the U.S. financial system posed by Huione Group, as identified in the
NPRM and this final rule.
A. Whether Similar Action Has Been or Is Being Taken by Other Nations
or Multilateral Groups Regarding Huione Group
In March 2025, National Bank of Cambodia stripped Huione Pay PLC of
its banking license.\109\ Nevertheless, as established above, Huione
Group has continued to operate CVC services which are expressly
prohibited in Cambodia.\110\ Thus, FinCEN assesses that this special
measure is appropriate given Huione Group's ongoing and egregious
conduct, continuing even after one component lost its license to
operate.
---------------------------------------------------------------------------
\109\ National Bank of Cambodia, List of Payment Service
Institutions (Mar. 31, 2025), <a href="https://www.nbc.gov.kh/english/supervision/payment_service.php">https://www.nbc.gov.kh/english/supervision/payment_service.php</a> (last accessed July 28, 2025).
\110\ Reuters, Exclusive: North Korean hackers sent stolen
crypto to wallet used by Asian payment firm (July 15, 2024), <a href="https://www.reuters.com/technology/cybersecurity/north-korean-hackers-sent-stolen-crypto-wallet-used-by-asian-payment-firm-2024-07-15/">https://www.reuters.com/technology/cybersecurity/north-korean-hackers-sent-stolen-crypto-wallet-used-by-asian-payment-firm-2024-07-15/</a>.
---------------------------------------------------------------------------
B. Whether the Imposition of Any Particular Special Measure Would
Create a Significant Competitive Disadvantage, Including Any Undue Cost
or Burden Associated With Compliance, for Financial Institutions
Organized or Licensed in the United States
While FinCEN assesses that the final rule would place some cost and
burden on covered financial institutions, these burdens are neither
undue nor inappropriate in view of the threat posed by the illicit
activity facilitated by Huione Group. As described in the NPRM, Huione
Group has no direct USD correspondent relationships with U.S. financial
institutions and instead, accesses USD through nested corresponding
relationships, outside the United States. These accounts may be used
for commercial payments, as well as foreign exchange and money markets.
Covered financial institutions and transaction partners have ample
opportunity to arrange for alternative payment mechanisms in the
absence of correspondent banking relationships with Huione Group.
As such, a prohibition on correspondent banking with Huione Group
will impose minimal additional compliance costs for covered financial
institutions, which would most commonly involve adding Huione Group to
existing sanctions and money laundering screening tools. FinCEN
assesses that given the risks posed by Huione Group's facilitation of
money laundering, the additional burden on covered financial
institutions in preventing the opening of correspondent accounts with
Huione Group, as well as conducting due diligence on foreign
correspondent account holders and notifying them of the prohibition,
will be minimal.
C. The Extent to Which the Action or the Timing of the Action Would
Have a Significant Adverse Systemic Impact on the International
Payment, Clearance, and Settlement System, or on Legitimate Business
Activities of Huione Group
FinCEN assesses that imposing the final rule would have minimal
impact upon the international payment, clearance, and settlement
system. As a comparatively small financial institution responsible for
a nominal amount of transaction volume in the region, Huione Group is
not a systemically important financial institution in Cambodia,
regionally, or globally. FinCEN views that prohibiting Huione Group's
access to U.S. correspondent banking channels would not substantially
affect the volume of legitimate cross-border transactions. Further, a
prohibition under special measure five will not prevent Huione Group
from conducting legitimate business activities in other foreign
currencies.
D. The Effect of the Proposed Action on United States National Security
and Foreign Policy
As described above, evidence available to FinCEN demonstrates that
Huione Group serves as a significant conduit for money laundering by
TCOs engaged in CVC investment scams and DPRK-related actors engaging
in CVC heists. Imposing special measure five will: (1) close Huione
Group's access to USD; (2) inhibit Huione Group's ability to act as an
illicit finance facilitator for DPRK and TCOs engaged in CVC
[[Page 48306]]
investment scams; and (3) raise awareness of the way illicit actors
exploit weaknesses in vulnerable jurisdictions to circumvent sanctions
and finance WMD and ballistic missile proliferation.
E. Consideration of Alternative Special Measures
In assessing the appropriate special measure to impose, FinCEN
considered alternatives to a prohibition on the opening or maintaining
in the United States of correspondent accounts or payable-through
accounts, including the imposition of one or more of the first four
special measures, or imposing conditions on the opening or maintaining
of correspondent accounts under special measure five. Having considered
these alternatives and for the reasons set out below, FinCEN assesses
that none of the other special measures available under section 311
would appropriately address the risks posed by Huione Group and the
urgent need to prevent it from accessing USD through correspondent
banking.
With public acknowledgements of its failure to address significant
AML/KYC deficiencies, Huione Group continues to present a significant
money laundering risk, particularly related to DPRK cyber heists and
TCO-run scams. Taken as a whole, Huione Group's history of involvement
in laundering proceeds of illicit activities, and its creation of an
unfreezable stablecoin, presents a heightened risk that Huione Group
will continue to be used by illicit actors. A key feature of Huione
Group's service offerings includes a marketplace to sell items that
enable CVC investment scams, and money laundering services to launder
the proceeds of the scams. Huione Group serves as a significant node
within the money laundering ecosystem that enables criminals to both
obtain necessary items to carry out various crimes, and the services to
launder the proceeds of those crimes.
Because of the nature, extent, and purpose of the obfuscation
engaged in by Huione Group, any special measure intended to mandate
additional information collection would likely be ineffective and
insufficient to determine the true identity of illicit finance actors
who transact with the group. For example, the provision under special
measure one, that ``the identity and address of the participants in a
transaction or relationship, including the identity of the originator
of any funds transfer'' be collected in records and reports, could be
circumvented by the operations of shell companies, wherein the reported
identity of the originator serves to obscure the true beneficial owner
or originator.\111\ This would be ineffective in preventing illicit
transactions. Huione Group's record of such circumvention suggests that
special measure one would not adequately protect the U.S. financial
system from the threats posed by the financial institution.
---------------------------------------------------------------------------
\111\ 31 U.S.C. 5318A(b)(1)(B)(i).
---------------------------------------------------------------------------
Further, the requirements under special measures three and four,
that domestic financial institutions obtain ``with respect to each
customer (and each such representative), information that is
substantially comparable to that which the depository institution
obtains in the ordinary course of business with respect to its
customers residing in the United States,'' are also likely to be
ineffective.\112\ Huione Group's use of nested correspondent account
access through layers of payment systems would render these alternative
measures ineffective. Only significant effort and expense by U.S.
institutions could fill this gap, which would impose a disproportionate
compliance burden, with no guarantee that the money laundering threat
would be addressed through customer due diligence research. FinCEN also
considered special measure two, which may require domestic financial
institutions to ``obtain and retain information concerning the
beneficial ownership of any account opened or maintained in the United
States by a foreign person.'' \113\ The agency determined that this
special measure would likely be ineffective since the concerns
involving Huione Group do not involve the opening or maintaining of
accounts in the U.S. by foreign persons.
---------------------------------------------------------------------------
\112\ 31 U.S.C. 5318A(b)(3)(B).
\113\ 31 U.S.C. 5318A(b)(2).
---------------------------------------------------------------------------
FinCEN similarly assesses that merely imposing conditions under
special measure five would be inadequate to address the risks posed by
Huione Group's activities. Special measure five enables FinCEN to
impose conditions as an alternative to a prohibition on the opening or
maintaining of correspondent accounts.\114\ Given Huione Group's
longstanding ties to DPRK proliferation finance, coupled with money
laundering tied to CVC investment scams, and public acknowledgment of
failures of its AML/KYC program, FinCEN determined that imposing any
condition would not be an effective measure to safeguard the U.S.
financial system. FinCEN assesses that the billions of dollars' worth
of CVC and fiat laundered through Huione Group's exploitation of its
access to USD, and the exposure of U.S. financial institutions to
Huione Group's illicit activity, outweigh the value in providing
conditioned access to the U.S. financial system for any purportedly
legitimate business activity. Conditions on the opening or maintaining
of correspondent accounts would likely be insufficient to prevent
illicit financial flows through the U.S. financial system, given Huione
Group's inadequate AML/KYC program.
---------------------------------------------------------------------------
\114\ 31 U.S.C. 5318A(b)(5).
---------------------------------------------------------------------------
In sum, FinCEN assesses that any condition or additional
recordkeeping or reporting requirement would be an ineffective measure
to safeguard the U.S. financial system from the illicit behavior
facilitated by Huione Group. Such measures would not prevent Huione
Group from accessing the correspondent accounts of U.S. financial
institutions, thus leaving the U.S. financial system vulnerable to
processing illicit transfers that are likely to finance DPRK's nuclear
proliferation, or CVC investment scams, resulting in significant
national security and money laundering risk. In addition, no
recordkeeping or reporting requirements or conditions would be
sufficient to guard against the risks posed by a financial institution
that processes transactions that are designed to obscure the
transactions' true nature and are ultimately for the benefit of DPRK
and TCOs. Therefore, FinCEN has determined that a prohibition on
opening or maintaining correspondent banking relationships is the only
special measure available under section 311 that can adequately protect
the U.S. financial system from the illicit finance risk posed by Huione
Group. For these reasons, and after thorough consideration of alternate
measures, FinCEN assesses that no measures short of full prohibition on
correspondent or payable-through banking access would be sufficient to
address the money laundering risks posed by Huione Group.
IV. Section-by-Section Analysis
A. 1010.664(a)--Definitions
1. Definition of Huione Group
The final rule defines the term ``Huione Group'' to mean all
subsidiaries, branches, and offices of Huione Group operating as a
financial institution in any jurisdiction outside of the United States,
including Haowang Guarantee (formerly known as Huione Guarantee),
Huione Pay PLC, and Huione Crypto Sp[oacute][lstrok]ka Z
Ograniczon[aogon] Odpowiedzialno[sacute]ci[aogon] (d/b/a Huione
Crypto).
[[Page 48307]]
2. Definition of Correspondent Account
The final rule defines the term ``correspondent account'' to have
the same meaning as the definition contained in 31 CFR
1010.605(c)(1)(ii). In the case of a U.S. depository institution, this
broad definition includes most types of banking relationships between a
U.S. depository institution and a foreign bank that are established to
provide regular services, dealings, and other financial transactions,
including a demand deposit, savings deposit, or other transaction or
asset account, and a credit account or other extension of credit.
FinCEN is using the same definition of ``account'' for purposes of this
final rule as is established for depository institutions in the final
rule implementing the provisions of section 312 of the USA PATRIOT Act,
requiring enhanced due diligence for correspondent accounts maintained
for certain foreign banks.\115\ Under this definition, ``payable-
through accounts'' are a type of correspondent account.
---------------------------------------------------------------------------
\115\ See 31 CFR 1010.605(c)(2)(i).
---------------------------------------------------------------------------
In the case of securities broker-dealers, futures commission
merchants, introducing brokers in commodities, and investment companies
that are open-end companies (mutual funds), FinCEN is also using the
same definition of ``account'' for purposes of this final rule as was
established for these entities in the final rule implementing the
provisions of section 312 of the USA PATRIOT Act, requiring due
diligence for correspondent accounts maintained for certain foreign
banks.\116\
---------------------------------------------------------------------------
\115\ See 31 CFR 1010.605(c)(2)(ii)-(iv).
---------------------------------------------------------------------------
3. Definition of Covered Financial Institution
The final rule defines the term ``covered financial institution''
by reference to 31 CFR 1010.605(e)(1), the same definition used in the
BSA rule (31 CFR 1010.610) requiring the establishment of due diligence
programs for correspondent accounts for financial institutions. In
general, this definition includes the following:
<bullet> a bank;
<bullet> a broker or dealer in securities;
<bullet> a futures commission merchant or an introducing broker in
commodities; and
<bullet> a mutual fund.
4. Definition of Foreign Banking Institution
The final rule defines the term ``foreign banking institution'' to
mean a bank organized under foreign law, or an agency, branch, or
office located outside the United States of a bank. The term does not
include an agent, agency, branch, or office within the United States of
a bank organized under foreign law.
5. Definition of Subsidiary
The final rule defines the term ``subsidiary'' to mean a company of
which more than 50 percent of the voting stock or an otherwise
controlling interest is owned by another company.
B. 1010.664(b)--Prohibition on Accounts and Due Diligence Requirements
for Covered Financial Institutions
1. Prohibition on Opening or Maintaining Correspondent Accounts
Section 1010.664(b)(1) of the final rule prohibits covered
financial institutions from opening or maintaining in the United States
a correspondent account for, or on behalf of, Huione Group.
2. Prohibition on Use of Correspondent Accounts Involving Huione Group
Section 1010.664(b)(2) of the final rule requires covered financial
institutions to take reasonable steps to not process a transaction for
the correspondent account of a foreign banking institution in the
United States if such a transaction involves Huione Group. Such
reasonable steps are described in 1010.664(b)(3), which sets forth the
special due diligence requirements a covered financial institution
would be required to take when it knows or has reason to believe that a
transaction involves Huione Group.
3. Special Due Diligence for Correspondent Accounts
As a corollary to the prohibition set forth in section
1010.664(b)(1) and (2), section 1010.664(b)(3) of the final rule
requires covered financial institutions to apply special due diligence
to all of their foreign correspondent accounts that is reasonably
designed to guard against such accounts being used to process
transactions involving Huione Group. As part of that special due
diligence, covered financial institutions are required to notify those
foreign correspondent account holders that the covered financial
institutions know or have reason to believe provide services to Huione
Group, that such correspondents may not provide Huione Group with
access to the correspondent account maintained at the covered financial
institution. A covered financial institution may satisfy this
notification requirement using the following notice:
Notice: Pursuant to U.S. regulations issued under Section 311 of
the USA PATRIOT Act, see 31 CFR 1010.664, we are prohibited from
opening or maintaining in the United States a correspondent account
for, or on behalf of, Huione Group. The regulations also require us
to notify you that you may not provide Huione Group, including any
of its subsidiaries, branches, and offices access to the
correspondent account you hold at our financial institution. If we
become aware that the correspondent account you hold at our
financial institution has processed any transactions involving
Huione Group, including any of its subsidiaries, branches, and
offices, we will be required to take appropriate steps to prevent
such access, including terminating your account.
The purpose of the notice requirement is to aid cooperation with
correspondent account holders in preventing transactions involving
Huione Group from accessing the U.S. financial system. FinCEN does not
require or expect a covered financial institution to obtain a
certification from any of its correspondent account holders that access
will not be provided to comply with this notice requirement.
Methods of compliance with the notice requirement could include,
for example, transmitting a notice by mail, fax, or email. The notice
should be transmitted whenever a covered financial institution knows or
has reason to believe that a foreign correspondent account holder
provides services to Huione Group.
Special due diligence also includes implementing risk-based
procedures designed to identify any use of correspondent accounts to
process transactions involving Huione Group. A covered financial
institution would be expected to apply an appropriate screening
mechanism to identify a funds transfer order that on its face listed
Huione Group as the financial institution of the originator or
beneficiary, or otherwise referenced Huione Group in a manner
detectable under the financial institution's normal screening
mechanisms. An appropriate screening mechanism could be the mechanisms
used by a covered financial institution to comply with various legal
requirements, such as commercially available software programs used to
comply with the economic sanctions programs administered by the U.S.
Department of the Treasury's OFAC.
4. Recordkeeping and Reporting
Section 1010.664(b)(4) of the final rule does not impose any
reporting requirement upon any covered financial institution that is
not otherwise required by applicable law or regulation. A covered
financial institution must, however, document its compliance with
[[Page 48308]]
the notification requirement described above in section 1010.664(b)(3).
V. Severability
If any of the provisions of this rule, or the application thereof
to any person or circumstance, is held to be invalid, such invalidity
shall not affect the application of such provisions to other persons or
circumstances that can be given effect without the invalid provision or
application.
The provisions of this rule can function sensibly if any specific
provision or application is invalidated, enjoined or stayed. For
example, if a court were to hold as invalid the application of the rule
with respect to any identified Component of Huione Group, FinCEN would
preserve the finding that all other Components of Huione Group are
foreign financial institutions of primary money laundering concern. In
such an instance, the provisions of the rule should remain in effect,
as those provisions could function sensibly with respect to the
remainder of Huione Group. In sum, in the event that any of the
provisions of this rule, or the application thereof to any person or
circumstance, is held to be invalid, FinCEN has crafted this rule with
the intention to preserve its provisions to the fullest extent possible
and any adverse holding should not affect other provisions.
VI. Regulatory Impact Analysis
FinCEN has analyzed this final rule under Executive Orders 12866,
13563, the Regulatory Flexibility Act,\117\ the Unfunded Mandates
Reform Act,\118\ and the Paperwork Reduction Act.\119\
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\117\ 5 U.S.C. 603.
\118\ 2 U.S.C. 1532.
\119\ 44 U.S.C. 3507(a)(1)(D).
---------------------------------------------------------------------------
As discussed above, the intended effects of the imposition of
special measure five to Huione Group are twofold. The rule is expected
to: (1) combat and deter money laundering associated with Huione Group
that facilitates proliferation financing; and (2) prevent Huione Group
from using the U.S. financial system to enable its illicit finance
behavior. In the analysis below, FinCEN discusses the economic effects
that are expected to accompany adoption of the rule as proposed and
assesses such expectations in more granular detail. This discussion
includes an explanation of how FinCEN's assumptions and methodological
choices have influenced FinCEN's conclusions.
A. Executive Orders
Executive Orders 12866 and 13563 direct agencies to assess costs
and benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). Executive Order 13563
emphasizes the importance of quantifying both costs and benefits, of
reducing costs, of harmonizing rules, and of promoting flexibility.
It has been determined that this final rule is not a significant
regulatory action under section 3(f) of Executive Order 12866.
Accordingly, a regulatory impact analysis is not required.
B. Regulatory Flexibility Act
When an agency issues a final rule, the Regulatory Flexibility Act
(RFA) requires the agency to ``prepare and make available for public
comment a final regulatory flexibility analysis'' (FRFA) that will
``describe the impact of the proposed rule on small entities.'' \120\
However, section 605 of the RFA allows an agency to certify a rule, in
lieu of preparing an analysis, if the final rule is not expected to
have a significant economic impact on a substantial number of small
entities. While this final rule applies to all covered financial
institutions as defined,\121\ FinCEN does not expect the rule to affect
a substantial number of entities in practice, and FinCEN expects that
few if any of these entities would meet the criteria necessary to be
considered small entities for the purposes of the RFA.\122\
Furthermore, for the reasons described below, FinCEN assesses that even
if a small entity was affected by the final rule these changes would
not have a significant economic impact on such entities.\123\
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\120\ 5 U.S.C. 603(a).
\121\ See note 3; see also Section IV.A.3 defining ``covered
financial institution.''
\122\ 5 U.S.C. 601(3)-(5).
\123\ See also infra Section V.D. annual average burden
estimates per expected affected covered financial institution.
---------------------------------------------------------------------------
In addition to prohibiting covered financial institutions from
opening or maintaining in the United States a correspondent account
for, or on behalf of, Huione Group, this final rule requires covered
financial institutions to take reasonable measures to detect use of
correspondent accounts they do open or maintain to process transactions
involving Huione Group. All U.S. persons, including U.S. financial
institutions, currently must comply with OFAC sanctions, and U.S.
financial institutions generally have suspicious activity reporting
requirements and systems in place to screen transactions for compliance
with OFAC sanctions and section 311 special measures administered by
FinCEN. The systems that U.S. financial institutions have in place to
comply with these requirements can easily be modified to comply with
this final rule. Thus, the special due diligence that is required under
the final rule--i.e., preventing the processing of transactions
involving Huione Group and the transmittal of notification to certain
correspondent account holders--would not impose a significant
additional economic burden upon small U.S. financial institutions. For
these reasons, FinCEN certifies that the requirements contained in this
rulemaking would not have a significant impact on a substantial number
of small businesses.
C. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 \124\
(Unfunded Mandates Reform Act), requires that an agency prepare a
budgetary impact statement before promulgating a rule that may result
in expenditure by the state, local, and tribal governments, in the
aggregate, or by the private sector, of USD 100 million or more in any
one year, adjusted for inflation.\125\ If a budgetary impact statement
is required, section 202 of the Unfunded Mandates Reform Act also
requires an agency to identify and consider a reasonable number of
regulatory alternatives before promulgating a rule.\126\
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\124\ 2 U.S.C. 1532.
\125\ Id.
\126\ Id.
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FinCEN has determined that this final rule will not result in
expenditures by state, local, and tribal governments in the aggregate,
or by the private sector, of an annual USD 100 million or more,
adjusted for inflation (approximately USD 187 million).\127\
Accordingly, FinCEN has not prepared a budgetary impact statement or
specifically
[[Page 48309]]
addressed the regulatory alternatives considered.
---------------------------------------------------------------------------
\127\ The Unfunded Mandates Reform Act requires an assessment of
mandates that will result in an annual expenditure of USD 100
million or more, adjusted for inflation. The U.S. Bureau of Economic
Analysis reports the annual value of the gross domestic product
(GDP) deflator for calendar year 1995, the year of the Unfunded
Mandates Reform Act, as 66.939, and as 125.428 for calendar year
2024, the most recent annual value available. See U.S. Bureau of
Economic Analysis, ``Table 1.1.9. Implicit Price Deflators for Gross
Domestic Product,'' <a href="https://www.bea.gov/itable/">https://www.bea.gov/itable/</a> (last accessed Oct.
3, 2025). Thus, the inflation adjusted estimate for USD 100 million
is 125.428/66.939 x 100 = USD 187.377 million.
---------------------------------------------------------------------------
D. Paperwork Reduction Act
The PRA imposes certain requirements on Federal agencies in
connection with their conducting or sponsoring any collection of
information as defined by the PRA. Under the PRA, an agency may not
conduct or sponsor, and a person is not required to respond to, a
collection of information unless it displays a valid OMB control
number. The new collections of information required by this final rule
(31 CFR 1010.664) have been approved by OMB in accordance with the
Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., under
control number 1506-0083.
The notification requirement in section 1010.664(b)(3)(i)(A) is
intended to aid cooperation from foreign correspondent account holders
in preventing transactions involving Huione Group from being processed
by the U.S. financial system. The information required to be maintained
by section 664(b)(4) will be used by federal agencies and certain self-
regulatory organizations to verify compliance by covered financial
institutions with the notification requirement in section
1010.664(b)(3)(i)(A). The collection of information is mandatory.
In promulgating a final rule, FinCEN may revise estimates of
anticipated PRA burden based on comments received in response to the
NPRM and updates to the final rule and underlying data sources. FinCEN
did not receive any comments with respect to the original burden and
cost estimates provided in the NPRM PRA,\128\ and therefore, no
responsive revisions were required. Further revisions to reflect
updates to underlying data sources and harmonize the final rule PRA
estimates with the broader portfolio of OMB control numbers assigned to
311 special measures are explained below.
---------------------------------------------------------------------------
\128\ See supra Section II.C for discussion of comment letters
received.
---------------------------------------------------------------------------
Frequency: As required.
Description of Affected Financial Institutions: Only those covered
financial institutions defined in section 1010.664(a)(3) that are
engaged in correspondent banking with, or processing transactions
potentially involving, Huione Group as defined in section
1010.664(b)(1) and (2) would be affected.
Estimated Number of Potential Respondents: Approximately
15,710.\129\
---------------------------------------------------------------------------
\129\ This estimate is informed by public and non-public data
sources regarding both an expected maximum number of entities that
may be affected and the number of active, or currently reporting,
registered financial institutions.
Table 1--Estimates of Covered Financial Institutions by Type
------------------------------------------------------------------------
Financial institution type Number of entities
------------------------------------------------------------------------
Banks with a Federal Functional Regulator (FFR) \b\ 8,995
\a\..............................................
Banks without an FFR \c\.......................... \d\ 395
Broker-dealers in securities \e\.................. \f\ 3,320
Open end mutual funds \g\......................... \h\ 2,036
Futures commission merchants \i\.................. \j\ 65
Introducing brokers in commodities \k\............ \l\ 899
------------------------------------------------------------------------
\a\ See 31 CFR 1010.100(t)(1); see also 31 CFR 1010.100(d).
\b\ Bank data is as of Jan. 17, 2025, from Federal Deposit Insurance
Corporation BankFind (<a href="https://banks.data.fdic.gov/bankfind-suite/bankfind">https://banks.data.fdic.gov/bankfind-suite/bankfind</a> bankfind). Credit union data is as of Sep. 2024 from the National
Credit Union Administration Quarterly Data Summary Reports (<a href="https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports">https://ncua.gov/analysis/credit-union-corporate-call-report-data/quarterly-data-summary-reports</a>).
\c\ 31 CFR 1020.210(b).
\d\ The Board of Governors of the Federal Reserve System Master Account
and Services Database contains data on financial institutions that
utilize Reserve Bank financial services, including those with no
federal regulator. FinCEN used this data to identify 395 banks and
credit unions utilizing Reserve Bank financial services with no
federal regulator. (<a href="https://www.federalreserve.gov/paymentsystems/master-account-and-services-database-existing-access.htm">https://www.federalreserve.gov/paymentsystems/master-account-and-services-database-existing-access.htm</a>).
\e\ 31 CFR 1010.100(t)(2).
\f\ According to the Securities and Exchange Commission (SEC), there are
3,320 broker-dealers in securities as of Mar. 2025 from website
``Company Information About Active Broker-Dealers'' (<a href="https://www.sec.gov/foia-services/frequently-requested-documents/company-information-about-active-broker-dealers">https://www.sec.gov/foia-services/frequently-requested-documents/company-information-about-active-broker-dealers</a>).
\g\ See 31 CFR 1010.100(t)(10); see also 31 CFR 1010.100(gg).
\h\ According to the SEC, in 2024 there were 2,036 open-end registered
investment companies that report on Form N-CEN. (<a href="https://www.sec.gov/dera/data/form-ncen-data-sets">https://www.sec.gov/dera/data/form-ncen-data-sets</a>).
\i\ 31 CFR 1010.100(t)(8).
\j\ According to the Commodity Futures Trading Commission (CFTC), there
are 65 futures commission merchants as of November 30, 2024. See
Financial Data for FCMs, <a href="https://www.cftc.gov/MarketReports/financialfcmdata/index.htm">https://www.cftc.gov/MarketReports/financialfcmdata/index.htm</a>.
\k\ 31 CFR 1010.100(t)(9).
\l\ According to the National Futures Association, there are 899
introducing brokers in commodities as of Dec. 31, 2024 from website
``NFA Membership Totals'' (<a href="https://www.nfa.futures.org/registration-membership/membership-and-directories.html">https://www.nfa.futures.org/registration-membership/membership-and-directories.html</a>).
Estimated Number of Expected Respondents: Approximately 127.\130\
---------------------------------------------------------------------------
\130\ While this regulation applies to all covered institutions
described in Table 1, in practice the burden will only be imposed on
select institutions that maintain correspondent accounts for foreign
banks. Table 2 below presents an estimate of this subpopulation of
banks, brokers or dealers in securities, mutual funds, futures
commission merchants, and introducing brokers in commodities based
on data from the most recent calendar year end.
Table 2--Estimates of Affected Financial Institutions by Type
------------------------------------------------------------------------
Financial institution type Number of entities
------------------------------------------------------------------------
Banks with an FFR................................. \a\ 60
Banks without an FFR.............................. \b\ 17
Broker-dealers in securities...................... \c\ 26
Open end mutual funds............................. \d\ 16
[[Page 48310]]
Futures commission merchants...................... \e\ 1
Introducing brokers in commodities................ \f\ 7
------------------------------------------------------------------------
\a\ Data are from the FFIEC Central Data Repository for Reports of
Condition and Income (Call Reports) and Uniform Bank Performance
Reports (UBPRs), available for most FDIC-insured institutions. Using
this source of data, FinCEN determines that as of Q3 2024,
approximately 60 banks (as defined by FinCEN regulations, see 31 CFR
1010.100(d)) will be affected by this rule on any given year.
Specifically, we determine that there are approximately 60 banks that
report non-zero values for deposit liabilities of banks in foreign
countries. Deposit liabilities in a foreign country is an indication
that a bank maintains correspondent accounts with a foreign financial
institution.
\b\ The Board of Governors of the Federal Reserve System Master Account
and Services Database contains data on financial institutions that
utilize Reserve Bank financial services, including those with no
federal regulator. FinCEN used this data to identify an additional 17
international banking entities with no federal regulator and that do
not file Call Reports, but that are also likely to maintain
correspondent accounts with a foreign financial institution.
\c\ Broker dealers, unless they are publicly traded, are not required to
make reports indicating whether or not they have foreign correspondent
accounts or hold foreign deposits. FinCEN reviewed financial statement
data from 10-Q and 6-K filings with the SEC, and identified nine
publicly traded broker dealers with US operations that reported
foreign deposits. FinCEN also examined Suspicious Activity Reports
(SARs) filed by broker dealers in 2024 to identify another two non-
publicly traded broker dealers who appeared likely to be maintaining
foreign deposits. However, because many broker dealers are not
publicly traded and did not file SARs, FinCEN conservatively estimates
that the proportion of broker dealers with foreign correspondent
accounts will be similar to the proportion for banks (approximately
0.8%). 0.8% of 3,320 active broker dealers is approximately 26 broker
dealers assumed to have foreign correspondent accounts.
\d\ Mutual funds, futures commission merchants, and introducing brokers
in commodities generally use intermediary US banks to move and
maintain client deposits and funds for investment. Therefore, it is
unlikely that many of these institutions will maintain direct
correspondent accounts with foreign financial institutions outside of
their existing upstream banking relationships. However, because these
institutions may in some cases receive deposits from, make payments or
other disbursements, or otherwise transact directly with foreign
financial institutions, FinCEN conservatively estimates that the
proportion of mutual funds with foreign correspondent accounts will be
similar to the proportion for banks (approximately 0.8%). 0.8% of
2,036 active mutual funds is approximately 16 mutual funds assumed to
have foreign correspondent accounts.
\e\ 0.8% of 65 active futures commission merchants is approximately one
futures commission merchants assumed to have foreign correspondent
accounts.
\f\ 0.8% of 899 active introducing brokers in commodities is
approximately seven introducing brokers in commodities assumed to have
foreign correspondent accounts.
Estimated Average Annual Burden in Hours per Affected Financial
Institution: Imposing special measure five requirements as described in
this final rule is expected to result in a new, incremental
recordkeeping burden on certain covered financial institutions as
described above. Each anticipated component of this is outlined below.
Each affected covered financial institution is expected to incur a
recordkeeping burden associated with preparing and retaining the
materials necessary to demonstrate compliance with the requirements
contained in this final rule. This is expected to include records
related to:
A. Documenting the reasonable steps the financial institution
undertakes to ensure no transactions involving Huione Group are
processed for a foreign correspondent account, including:
1. Any investigative activities undertaken when the financial
institution knows or has reason to believe that a foreign bank's
correspondent account has been or is being used to process transactions
involving Huione Group.
2. Any subsequent activities undertaken to prevent such access,
including, where necessary, termination of the correspondent account.
B. Notifying, and documenting that the financial institution has
provided notice to, foreign correspondent account holders that the
financial institution knows or has reason to believe provide services
to Huione Group, that such correspondents may not provide Huione Group
with access to the correspondent account maintained at the financial
institution.
C. Documenting the reasonable steps the financial institution took
with respect to special due diligence requirements, including but not
limited to, the reasoning that informed decisions to adopt (or not
adopt) new measures adding to its existing risk-based approach, and
those new measures.
The estimated average annual burden associated with the collection
of information in this final rule in the first year of operations is,
in total, one business day, or eight hours per affected financial
institution.
Estimated Total Annual Burden in Year One: Approximately 1,016
hours.\131\
---------------------------------------------------------------------------
\131\ 127 expected respondents multiplied by eight hours per
respondent equals 1,016 total annual burden hours.
---------------------------------------------------------------------------
Estimated Total Annual Cost in Year One: Approximately
$121,920.\132\
---------------------------------------------------------------------------
\132\ The wage rate applied here is a general composite hourly
wage ($84.55), scaled by a private-sector benefits factor of 1.42
($120.07 = $84.55 x 1.42), that incorporates the mean wage data
(available for download at <a href="https://www.bls.gov/oes/tables.htm">https://www.bls.gov/oes/tables.htm</a>, ``May
2023--National industry-specific and by ownership'') associated with
the six occupational codes (11-1010: Chief Executives; 11-3021:
Computer and Information Systems Managers; 11-3031: Financial
Managers; 13-1041: Compliance Officers; 23-1010: Lawyers and
Judicial Law Clerks; 43-3099: Financial Clerks, All Other) for each
of the nine groupings of NAICS industry codes that FinCEN determined
are most directly comparable to its eleven categories of covered
financial institutions as delineated in 31 CFR parts 1020 to 1030.
The benefit factor is 1 plus the benefit/wages ratio, where as of
June 2023, Total Benefits = 29.4 and Wages and salaries = 70.6
(29.4/70.6 = 0.42) based on the private industry workers series data
downloaded from <a href="https://www.bls.gov/news.release/archives/ecec_09122023.pdf">https://www.bls.gov/news.release/archives/ecec_09122023.pdf</a> (accessed Dec. 22, 2024). Given that many
occupations provide benefits beyond cash wages (e.g., insurance,
paid leave, etc.), the private sector benefit is applied to reflect
the total cost to the employer. 1,016 total annual burden hours
multiplied by $120 per hour equals a total annual cost of $121,920.
---------------------------------------------------------------------------
In subsequent years, FinCEN estimates that the average annual
burden associated with the collection of information will be
significantly reduced.\133\ FinCEN expects that the primary ongoing
burden of compliance with FinCEN special measures would primarily
accrue in connection with the opening of new foreign correspondent
accounts, at which point a covered financial institutions would need to
ensure that new account holders receive information on entities subject
to special measures and agree not to conduct transactions on their
behalf. FinCEN has previously estimated that financial institutions
that maintain foreign correspondent accounts will open an average of 10
new accounts per year.\134\ FinCEN expects the time
[[Page 48311]]
burden of special measure compliance associated with these new accounts
will not exceed 15 minutes (0.25 hours) per affected financial
institution.
---------------------------------------------------------------------------
\133\ See supra Section VI.B discussion of how compliance with
the final rule is expected to be integrated into covered financial
institutions' broader OFAC sanctions and 311 special measures
compliance activities.
\134\ See FinCEN, Renewal Without Change of Prohibition on
Correspondent Accounts for Foreign Shell Banks; Records Concerning
Owners of Foreign Banks and Agents for Service of Legal Process, 90
FR 21987, 21994 (May 22, 2025).
---------------------------------------------------------------------------
Table Three presents a summary of FinCEN's estimates of PRA Burden
as expected to accrue during the first three years in which the final
rule is effective and provides a basis for the expected average annual
costs as estimated over the same time horizon.
Table 3--PRA Three-Year Pro Forma Burden Estimates
----------------------------------------------------------------------------------------------------------------
Year Number of respondents Hours per respondent Total burden hours
----------------------------------------------------------------------------------------------------------------
1....................................... 127 8.00 1,016.00
2....................................... 127 0.25 31.75
3....................................... 127 0.25 31.75
-----------------------------------------------------------------------
Average............................. 127 2.83 359.83
----------------------------------------------------------------------------------------------------------------
Estimated Three-Year Average Aggregate Annual Burden: Approximately
360 \135\ hours on average, per year.
---------------------------------------------------------------------------
\135\ This estimate is the average of 1,016 expected burden
hours in year one of implementation and 31.75 hours in years two and
three, respectively, rounded to the nearest whole hour.
---------------------------------------------------------------------------
Estimated Three-Year Average Aggregate Annual Cost: Approximately
$43,277.16.\136\
---------------------------------------------------------------------------
\136\ See supra note 132. An average annual burden of 63.5 hours
over 3 years multiplied by $120.07 per hour equals an average annual
cost of $43,277.16.
---------------------------------------------------------------------------
VII. Regulatory Text
List of Subjects in 31 CFR Part 1010
Administrative practice and procedure, Banks, Banking, Brokers,
Crime, Foreign banking, Terrorism.
Authority and Issuance
For the reasons set forth in the preamble, 31 CFR part 1010 is
amended as follows:
PART 1010--GENERAL PROVISIONS
0
1. The authority citation for part 1010 continues to read as follows:
Authority: 12 U.S.C. 1829b and 1951-1959; 31 U.S.C. 5311-5314,
5316-5336; title III, sec. 314 Pub. L. 107-56, 115 Stat. 307; sec.
2006, Pub. L. 114-41, 129 Stat. 457; sec. 701 Pub. L. 114-74, 129
Stat. 599; sec. 6403, Pub. L. 116-283, 134 Stat. 3388.
0
2. Add 1010.664 to read as follows:
Sec. 1010.664 Special measures regarding Huione Group.
(a) Definitions. For purposes of this section, the following terms
have the following meanings.
(1) Huione Group. The term ``Huione Group'' means all subsidiaries,
branches, and offices of Huione Group operating as a financial
institution in any jurisdiction outside of the United States, including
Haowang Guarantee (formerly known as Huione Guarantee), Huione Pay PLC,
and Huione Crypto Sp[oacute][lstrok]ka Z Ograniczon[aogon]
Odpowiedzialno[sacute]ci[aogon] (d/b/a Huione Crypto).
(2) Correspondent account. The term ``correspondent account'' has
the same meaning as provided in 1010.605(c)(l)(ii).
(3) Covered financial institution. The term ``covered financial
institution'' has the same meaning as provided in 1010.605(e)(1).
(4) Foreign banking institution. The term ``foreign banking
institution'' means a bank organized under foreign law, or an agency,
branch, or office located outside the United States of a bank. The term
does not include an agent, agency, branch, or office within the United
States of a bank organized under foreign law.
(5) Subsidiary. The term ``subsidiary'' means a company of which
more than 50 percent of the voting stock or an otherwise controlling
interest is owned by another company.
(b) Prohibition on accounts and due diligence requirements for
covered financial institutions--
(1) Prohibition on opening or maintaining correspondent accounts
for Huione Group. A covered financial institution shall not open or
maintain in the United States a correspondent account for, or on behalf
of, Huione Group.
(2) Prohibition on processing transactions involving Huione Group.
A covered financial institution shall take reasonable steps not to
process a transaction for the correspondent account in the United
States of a foreign banking institution if such a transaction involves
Huione Group.
(3) Special due diligence of correspondent accounts to prohibit
transactions. (i) A covered financial institution shall apply special
due diligence to its foreign correspondent accounts that is reasonably
designed to guard against their use to process transactions involving
Huione Group. At a minimum, that special due diligence must include:
(A) Notifying those foreign correspondent account holders that the
covered financial institution knows or has reason to believe provide
services to Huione Group that such correspondents may not provide
Huione Group with access to the correspondent account maintained at the
covered financial institution; and
(B) Taking reasonable steps to identify any use of its foreign
correspondent accounts by Huione Group, to the extent that such use can
be determined from transactional records maintained in the covered
financial institution's normal course of business.
(ii) A covered financial institution shall take a risk-based
approach when deciding what, if any, other due diligence measures it
reasonably must adopt to guard against the use of its foreign
correspondent accounts to process transactions involving Huione Group.
(iii) A covered financial institution that knows or has reason to
believe that a foreign bank's correspondent account has been or is
being used to process transactions involving Huione Group shall take
all appropriate steps to further investigate and prevent such access,
including the notification of its correspondent account holder under
paragraph (b)(3)(i)(A) of this section and, where necessary,
termination of the correspondent account.
(4) Recordkeeping and reporting. (i) A covered financial
institution is required to document its compliance with the
notification requirement set forth in this section.
(ii) Nothing in paragraph (b) of this section shall require a
covered financial institution to report any information not
[[Page 48312]]
otherwise required to be reported by law or regulation.
Andrea M. Gacki,
Director, Financial Crimes Enforcement Network.
[FR Doc. 2025-19571 Filed 10-15-25; 8:45 am]
BILLING CODE 4810-02-P
</pre></body>
</html>Indexed from Federal Register on October 16, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.