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Chainalysis tells House subcommittee blockchain tracing can expose scam supply chains; names Huai Wan platform as common denominator
Summary
Chainalysis and other witnesses told lawmakers blockchain analytics can reveal laundering and the infrastructure behind large crypto scams; the firm identified a peer‑to‑peer marketplace it said facilitates scam tools, laundering and fraud services.
Jacqueline Burns Coven, head of cyber threat intelligence at Chainalysis, told the subcommittee that blockchain analytics provide unusually granular visibility into cryptocurrency flows and the scam “kill chain.”
“Leveraging the blockchain's inherent transparency, we track cryptocurrency activity by illicit actors,” Coven said. She described so‑called pig‑butchering and investment scams in which victims are groomed and then induced to send funds to illicit wallets. Coven said Chainalysis’s data show scam operators received over $10 billion in cryptocurrency payments annually in recent years and that a peer‑to‑peer marketplace — referenced in testimony as “Huai Wan Guarantee” and also spoken about under variants such as “Hue1” or “WayOne” — provides infrastructure that lowers the cost of running scams at scale.
Chainalysis testified that funds tied to scams often move through identifiable touchpoints on public ledgers, which enables tracing and, in some cases, mid‑stream freezes of stablecoin balances. Coven said her firm has worked with law enforcement worldwide to support large seizures and recoveries and that the public‑ledger visibility can often connect a single payment to a scheme that includes hundreds of victim transfers.
Chainalysis and other witnesses recommended clearer regulatory expectations for crypto businesses, stronger AML/CFT standards in jurisdictions that enable laundering, and expanded training for state and local law enforcement to use blockchain tools. Coven called for “bidirectional scam reporting and response between public and private sectors” so financial institutions and analytics firms can act more quickly to prevent additional victimization.
Committee members asked how effective sanctions and coordinated law‑enforcement takedowns have been in disrupting these platforms. Coven said sanctions can be effective when paired with operational actions and rebranding of sanctioned services is a continuing challenge that requires sustained analytics and enforcement work.
The testimony did not report new enforcement actions from the committee; witnesses said additional funding and authorities for state and local law enforcement and clearer regulatory frameworks for stablecoins and crypto intermediaries would strengthen the domestic response to crypto‑enabled fraud.
