Regulation

The United States and United Kingdom have imposed significant sanctions against a multinational crime network based in Southeast Asia. This network, operating in Cambodia and Myanmar, has been accused of using trafficked workers to conduct fraudulent cryptocurrency investments.

Sanctions and Legal Actions

On Tuesday, the US Treasury Department announced substantial actions targeting 146 individuals within the Cambodia-based Prince Group. This group has been classified as a transnational criminal organization. Concurrently, the United Kingdom imposed sanctions on six entities and individuals linked to the Prince Group, freezing 19 properties in London valued at over 100 million pounds ($134 million).

The US Justice Department has also unsealed an indictment against Chen Zhi, the chair of the Prince Group, charging him with wire fraud and money laundering conspiracy. If convicted, Chen faces up to 40 years in prison. Additionally, the US has initiated its largest forfeiture action, seizing Bitcoin valued at over $14 billion.

Operation Details

Chen Zhi is accused of orchestrating a significant cyberfraud operation involving network centers labeled as forced labor camps across Cambodia and Myanmar. Workers, many of whom were Chinese, were reportedly deceived through false job advertisements, detained, and coerced into executing online fraud operations. These scams, often referred to as “pig-butchering,” involved creating fake romantic relationships online to persuade victims to invest in fraudulent cryptocurrency platforms.

Financial Operations

The proceeds from these fraudulent activities were allegedly laundered via the Prince Group’s gambling and cryptocurrency mining operations. These funds financed luxury purchases, including yachts, private jets, vacation homes, and art pieces such as a Picasso painting.

Since 2015, the Prince Group has reportedly operated under the guise of legitimate businesses across over 30 countries, using political influence and bribery to sustain its operations.

Impact and Responses

Jacob Daniel Sims, an expert on transnational crime, noted that the Prince Group plays a crucial role in global cyber-scamming infrastructure. Although the indictment and sanctions do not immediately dismantle these networks, they alter the risk considerations for global banks, real estate firms, and investors dealing with Cambodian elite funds.

The United Nations estimated that in 2023, approximately 100,000 individuals were coerced into executing online scams in Cambodia, with additional tens of thousands in Myanmar, Thailand, Laos, and the Philippines. Furthermore, East Timor has been identified as an emerging hotspot for such scams.