Interpreting the UNODC report: Revealing the globalization of money laundering routes by Southeast Asian scam groups

Author: Lisa

Editor: Liz

Background

In April 2025, the United Nations Office on Drugs and Crime (hereinafter referred to as "UNODC") released a report titled "The Global Impact of Southeast Asia's Scam Centers, Underground Banks, and Illegal Online Markets" [1]. The report systematically analyzes the emerging forms of transnational organized crime in Southeast Asia, particularly focusing on a new digital crime ecology centered around online scam centers, integrating underground bank money laundering networks and illegal online market platforms.

Shortly after the report was released, the U.S. Department of the Treasury [2] announced on May 5, 2025, sanctions against the Karen National Army (KNA) and its leaders and relatives, identifying them as a significant transnational criminal organization that leads and assists in carrying out cyber fraud, human trafficking, and cross-border money laundering activities. The border area controlled by the KNA between Myanmar and Thailand has become a gathering place for multiple scam groups, and its collusion with the Myanmar military has allowed it to lease land on a large scale, provide power guarantees, and security services in armed-controlled areas, supporting the daily operations of scam parks. On May 1, 2025, the U.S. Financial Crimes Enforcement Network [3] also listed Huione Group as a major money laundering concern, indicating that it is a key channel for North Korean hacker organizations and Southeast Asian scam groups to launder proceeds from virtual asset crimes, involving various types of virtual asset investment scams such as 'pig butchering'.

The report indicates that as the synthetic drug market in Southeast Asia becomes saturated, criminal groups are rapidly transforming, using fraud, money laundering, data trafficking, and human trafficking as profit-making means. They are constructing a cross-border, high-frequency, low-cost black production system through online gambling, virtual asset service providers, Telegram underground markets, and cryptocurrency payment networks. This trend initially erupted in the Mekong subregion (Myanmar, Laos, Cambodia) and quickly spread to regions with weak regulation such as South Asia, Africa, and Latin America, forming a distinct "gray export."

The UNODC warns that this type of crime pattern has become highly systematized, specialized, and globalized, relying on emerging technologies that continue to evolve, which has become an important blind spot in international security governance. In the face of the ongoing spreading threat, the report calls on governments to immediately strengthen the regulation of virtual assets and illegal financial channels, promote on-chain intelligence sharing and cross-border cooperation mechanisms among law enforcement agencies, and establish a more efficient anti-money laundering and anti-fraud governance system to curb this rapidly developing global security risk.

This article will analyze from the following four dimensions: the criminal ecosystem in Southeast Asia, global expansion outside Southeast Asia, emerging illegal network markets and money laundering services, and transnational criminal networks and global law enforcement collaboration.

Southeast Asia is gradually becoming the core of the criminal ecosystem.

With the rapid expansion of the Southeast Asian cybercrime industry, the region is gradually evolving into a key hub of the global criminal ecosystem. Criminal groups exploit the region's weak governance, ease of cross-border collaboration, and technological loopholes to establish highly organized and industrialized criminal networks. From Myawaddy in Myanmar to Sihanoukville in Cambodia, these scam centers are not only vast in scale but also continuously evolving, utilizing the latest technologies to evade crackdowns and obtaining cheap labor through human trafficking.

High liquidity and adaptability coexist

Southeast Asian cybercrime syndicates are highly mobile and adaptable, able to quickly relocate their activities in response to law enforcement pressures, political situations, or geopolitical conditions. For example, after Cambodia banned online gambling, a large number of fraud gangs moved to special economic zones such as Shan State in Myanmar and the Golden Triangle in Laos, and then relocated to the Philippines and Indonesia due to the war in Myanmar and regional joint law enforcement, forming a circular trend of "crackdown-transfer-return". These gangs disguise themselves with brick-and-mortar venues such as casinos, border special economic zones, and resorts, while "sinking" into more remote rural areas and border areas where law enforcement is weak, to avoid concentrated crackdowns. In addition, the organizational structure is becoming more and more "cellularized", and the fraud points are scattered within residential buildings, B&Bs and even outsourcing companies, showing strong resilience and redeployment capabilities.

Systematic evolution of the scam industry chain

Fraud syndicates are no longer loose gangs, but have established a "vertically integrated criminal industry chain" from data collection, fraud execution to money laundering and withdrawal. upstream relies on platforms such as Telegram for global victim data; The midstream carried out fraud through "pig killing", "false law enforcement", "investment inducement" and other means; Downstream banks rely on underground banks, OTC transactions, and stablecoin payments (such as USDT) to complete fund laundering and cross-border transfers. According to UNODC, cryptocurrency scams caused more than $5.6 billion in economic losses in the United States alone in 2023, with an estimated $4.4 billion attributed to the so-called "pig killing" scams, which are the most prevalent in Southeast Asia. The scale of fraud proceeds has reached "industrial level", forming a stable closed loop of profits, attracting more and more transnational criminal forces to participate in it.

Human Trafficking and the Black Market for Labor

The expansion of the fraud industry has been accompanied by systematic human trafficking and forced labor. The scam park has people from more than 50 countries around the world, especially young people from China, Vietnam, India, Africa and other places, who are often deceived into entering the country due to fake recruitment of "high-paying customer service" or "technical positions", and their passports are seized, violently controlled and even resold many times. In early 2025, more than 1,000 foreign victims will be repatriated in Myanmar's Kayin State alone. This model of "fraudulent economy + modern slavery" is no longer an isolated phenomenon, but a human support method that runs through the entire industrial chain, bringing serious humanitarian crises and diplomatic challenges.

The digitalization and the ecological evolution of criminal technology continue.

The fraud syndicate has strong technical adaptability, constantly upgrades anti-investigation methods, and builds a criminal ecology of "technology independence + information black box". On the one hand, they generally deploy infrastructure such as Starlink satellite communications, private power grids, and intranet systems, which are independent of local communication control to achieve "offline survival". On the other hand, a large number of encrypted communications (such as Telegram end-to-end encrypted groups), AI-generated content (deepfakes, virtual anchors), automated phishing scripts, etc., are used to improve the efficiency and camouflage of fraud. Some organizations have also launched the "Fraud-as-a-Service" ( Scam-as-a-Service) platform to provide technical templates and data support for other gangs, and promote the productization and servitization of criminal activities. This evolving technology-driven model is drastically undermining the effectiveness of traditional law enforcement methods.

Global expansion outside Southeast Asia

Southeast Asian criminal groups are no longer limited to local operations but are expanding globally, establishing new operational bases in other parts of Asia, Africa, South America, the Middle East, and even Europe. This expansion not only increases the difficulty of law enforcement but also makes crimes such as fraud and money laundering more internationalized. Criminal groups exploit local regulatory loopholes, corruption issues, and the weaknesses of financial systems to quickly penetrate new markets.

Asia

Taiwan, China: Becoming a research and development center for scam technologies, some criminal groups have established "white label" gambling software companies in Taiwan to provide technical support for scam centers in Southeast Asia.

Hong Kong and Macao, China: underground money transfer hubs that assist in cross-border capital flows, with some casino intermediaries involved in money laundering (such as the Sun City Group case).

Japan: Losses from online fraud are expected to increase by 50% in 2024, with some cases involving Southeast Asia scam centers.

South Korea: Cryptocurrency scams surge, criminal groups use Korean won stablecoins (such as KRW-pegged USDT) for money laundering.

India: Citizens trafficked to scam centers in Myanmar and Cambodia, with the Indian government rescuing over 550 people in 2025.

Pakistan and Bangladesh: Became a source of fraudulent labor, with some victims lured to Dubai and resold to Southeast Asia.

Africa

Nigeria: Nigeria has become an important destination for Asian scam networks diversifying into Africa. In 2024, Nigeria dismantled a large scam group, arresting 148 Chinese citizens and 40 Filipinos involved in cryptocurrency fraud.

Zambia: In April 2024, Zambia broke up a scam group, arresting 77 suspects, including 22 Chinese scam leaders, who were sentenced to a maximum of 11 years in prison.

Angola: At the end of 2024, Angola conducted a large-scale raid operation, detaining dozens of Chinese citizens suspected of participating in online gambling, fraud, and cybercrime.

South America

Brazil: The Online Gambling Legalization Act will be passed in 2025, but criminal groups still use unregulated platforms for money laundering.

Peru: Taiwan's criminal gang "Red Dragon Group" has been dismantled, rescuing more than 40 Malaysian workers.

Mexico: Drug trafficking groups launder money through Asian underground banks, charging a low commission of 0% - 6% to attract customers.

Middle East

Dubai: Becoming a global money laundering center. The main perpetrator of the $3 billion money laundering case in Singapore purchased luxury homes in Dubai, using shell companies to transfer funds. Fraud groups established "recruitment centers" in Dubai to lure workers to Southeast Asia.

Turkey: Some Chinese scam leaders obtain Turkish passports through investment citizenship programs to evade international warrants.

Europe

UK: London real estate becomes a tool for money laundering, with some funds coming from Southeast Asian scam proceeds.

Georgia: A "Little Southeast Asia" fraud center has appeared in Batumi, where criminal groups use casinos and football clubs for money laundering.

Emerging illegal online markets and money laundering services

As traditional criminal methods are being cracked down upon, Southeast Asian crime syndicates are turning to more covert and efficient illegal online markets and money laundering services. These emerging platforms generally integrate cryptocurrency services, anonymous payment tools, and underground banking systems, not only providing fraud toolkits, stolen data, AI deepfake software for criminal entities such as scam groups, human traffickers, and drug dealers, but also enabling rapid movement of funds through cryptocurrencies, underground money houses, and Telegram black markets, posing unprecedented challenges for global law enforcement agencies.

Telegram Black Market

Criminals in Southeast Asia are increasingly globalizing the range of services offered on numerous illegal online markets and forums based on Telegram. In contrast, the dark web not only requires a certain level of technical expertise, lacks real-time interaction, and has a higher technical barrier; whereas Telegram, due to its easy accessibility, mobile-first design, robust encryption features, instant messaging capabilities, and automated operations through bots, makes it easier for criminals in Southeast Asia to carry out scams and scale their activities.

In recent years, some of the most powerful and influential criminal networks in the region have taken control of multiple Telegram-based platforms, which have become the main places for various local criminals and service providers to gather, communicate, and conduct business. These illegal markets are often linked to cryptocurrency exchanges controlled by the same organizations, where a large number of vendors specialize in selling stolen data, hacking tools, malware, and various underground banking, money laundering, and cybercrime services, while other criminals—especially those engaged in online fraud—profit from these services.

Fully Light Guarantee

Fully Light Guarantee, as the prototype platform for early illegal markets in Southeast Asia, was established and operated by the Liu family, controlled by the Kokang Border Defense Army, in Shan State, Myanmar. At its peak, it attracted over 350,000 users. The platform not only serves as a fraud hub for the Kokang and Myawaddy regions but also acts as a trading market for human trafficking, recruitment by intermediaries, informal cross-border money laundering, and "black market" technical support. Its operations rely on hundreds of public and private groups, covering the entire chain from basic tool supply to fund cleaning.

Although the Kokang border army was overthrown in 2024, a large number of emerging markets supported by other criminal groups and adopting a similar "guarantee system" have emerged in the region before and after its capture. These new platforms have quickly absorbed the business resources affected and are still continuously expanding and evolving, posing a threat to the integrity of the financial system, regional stability, and international security.

Huione Guarantee

Over the past year, Huione Guarantee has become one of the world's largest illegal online marketplaces in terms of users and transaction volume, and is a key infrastructure for the expansion of the online fraud ecosystem in Southeast Asia. Headquartered in Phnom Penh, Cambodia, the Chinese-speaking platform has more than 970,000 users and thousands of connected providers at the time of writing. The company is affiliated with subsidiaries registered in countries such as Canada, Poland, Hong Kong, and Singapore, and has registered trademarks that are currently in force in the United States and other countries.

Since 2021, Huione Guarantee has processed tens of billions of dollars in cryptocurrency transactions, and on-chain analysis shows that the platform has become a one-stop service center for criminals to access the technology, infrastructure, data, and other resources needed for cyber fraud, cybercrime, large-scale money laundering, and sanctions evasion. Some experts estimate that the cryptocurrency wallets used by Huione Guarantee and its suppliers have received at least $24 billion in inflows over the past four years. Law enforcement and blockchain researchers have reported a clear link between the market and criminal syndicates that operate against victims around the world.

Huione has also launched a series of its own cryptocurrency-related products, including a cryptocurrency exchange, an online gambling platform integrated with cryptocurrency, the Xone Chain blockchain network, and its self-issued USD-backed stablecoin. This stablecoin claims to be "not restricted by traditional regulatory agencies" and aims to "avoid the freezing and transfer restrictions commonly associated with traditional digital currencies." In February 2025, the group announced the launch of the Huione Visa card and revealed that it is making significant investments in other large illegal online markets, social media, and messaging platforms, as well as professional money laundering services, including acquiring a 30% stake in Tudao Guarantee in December 2024. This series of actions highlights that Huione may be preparing to hedge against potential restrictions from mainstream platforms in the future.

Huione and Fully Light not only share some platform design and operational personnel, but also reflect an illegal business model that is being continuously replicated - namely, a platform-based guarantee at its core, transforming traditional black market transactions into "fintech" and "cross-border corporatization", forming an underground network economic system based in Southeast Asia and radiating globally. As countries strengthen regulation and enforcement, such platforms are showing development trends of shifting overseas, diversifying financial products, and increasing the intelligence of technological tools, severely disrupting the transparency of on-chain transactions and eroding the trust foundation of the global crypto asset ecosystem.

Transnational crime networks and global law enforcement cooperation

In Southeast Asia, some transnational criminal organizations exploit complex business structures to conceal illegal activities, particularly in money laundering and cyber fraud. For example, the billion-dollar money laundering case that broke out in Singapore in 2023 revealed a vast, cross-border, organized crime network that relies on multiple nationalities and the operation of cryptocurrency assets. Most of the suspects in the case were born in China, but they obtained multiple passports through investment immigration programs in countries like Cambodia, Cyprus, and Turkey, and widely established companies, bank accounts, and high-value real estate in Southeast Asia and overseas to cover illegal gains from telecom fraud, illegal online gambling, and more. Through a flexible combination of on-chain transactions, stablecoin payments, and offshore accounts, this criminal network can "island-hop" to transfer funds between different regulatory systems, significantly increasing the difficulty of cross-border financial regulation and criminal investigation tracing.

The case further reveals that the gang has direct connections with multiple Southeast Asian scam centers and defunct cryptocurrency exchanges in Hong Kong (such as AAX). Their funding flow extends to scam parks in the Clark Freeport Zone in the Philippines, the Bay casino in Cambodia, shell companies established in Taiwan, and even involves related assets within Canada. Some suspects are also involved in human trafficking and forced labor. Their illegal profits are laundered through false income statements, forged documents, and multiple underground stablecoin channels. With the enforcement efforts in the Philippines and Hong Kong, several executives involved in the case were arrested and their assets frozen in 2024, marking an initial success in international cooperation regarding this case. However, core fugitives are still fleeing using private jets and multiple passports, highlighting the deep challenges faced by current cross-border law enforcement in terms of technology and systems.

This case is a microcosm of the current reconstruction of the illegal online economic landscape in Southeast Asia. The two platforms previously mentioned, Huione Guarantee and Fully Light Guarantee, are key pivot points in constructing such cross-border financial crime "infrastructure." While providing guarantee services, they effectively act as "industry intermediaries" for crimes such as fraud, gambling, money laundering, and human trafficking, offering integrated services ranging from tools, accounts, transaction matching, to fund cleansing for multinational organizations like BG 2 (Mekong Crime Group). BG 2 further "cleans" its illegal income by setting up legitimate business fronts, investing in real estate and sports clubs, successfully expanding its criminal network to places like Georgia, and beginning to replicate the operational model of the Southeast Asian fraud industry chain.

On one hand, these organizations take advantage of multi-national identities, complex shell company structures, and on-chain payment methods to navigate between different jurisdictions, creating a de facto "law enforcement black hole"; on the other hand, due to factors such as lengthy judicial assistance procedures, strong anonymity of crypto assets, and the global distribution of victims, law enforcement in various countries finds it difficult to form an efficient joint strike mechanism. Although countries like Singapore and the Philippines have begun to strengthen anti-money laundering mechanisms, freeze on-chain assets, and initiate international wanted notices, relying on single-point actions is still far from sufficient in the face of a black network economy centered in Southeast Asia and increasingly driven by financial technology.

To curb such transnational organized cryptocurrency crimes, efforts need to be made from the following aspects to promote international cooperation and the construction of an on-chain governance system:

Promote the global standard for anti-money laundering of crypto assets ( KYC ) uniformity;

Rely on blockchain intelligence and judicial assistance agreements to strengthen cooperation in cross-border asset freezing and criminal tracing.

Establish multilateral mechanisms to sanction "high-risk platforms" and the "criminal guarantee market" that provides illegal services;

Strengthen tactical cooperation between law enforcement agencies, on-chain monitoring companies, and exchanges to compress the space for illegal fund transfers.

Conclusion and Recommendations

Raise awareness and understanding: The involvement of high-level government is crucial for enhancing awareness of fraud centers and related crimes. There is a need to strengthen the understanding of risks such as online fraud and underground banks, and to reinforce anti-corruption measures.

Strengthening the regulatory framework: It is necessary to regularly review and reform the existing legal framework, especially for regulations concerning money laundering, virtual assets, special economic zones, and online gambling. Improve the supervision mechanism to monitor the flow of funds in high-risk industries and strengthen legal provisions for asset recovery and victim protection.

Enhancing the technical and operational capabilities of law enforcement agencies: developing monitoring and investigation technologies, collecting and analyzing digital evidence, strengthening international cooperation, and improving the fairness of the judiciary. Improving law enforcement effectiveness through professional training and inter-agency collaboration.

Promote overall government response and inter-agency coordination: establish a national coordination mechanism to facilitate cooperation among various ministries and law enforcement agencies, and strengthen the identification and protection of victims of forced crimes. Enhance border management supervision to ensure cross-border crackdown on criminal activities.

Promote pragmatic and effective regional cooperation: strengthen cross-border collaboration, share information in a timely manner, and coordinate actions. Support joint investigations through regional platforms, implement risk-based response measures, and enhance multilateral cooperation.

These recommendations will help Southeast Asian countries address the key governance shortcomings highlighted in the report, enhance the awareness and response capabilities of governments, regulatory agencies, and law enforcement, thereby promoting regional security cooperation and combating transnational organized crime.

Summary

Analysis of the UNODC report indicates that Southeast Asia has become a hub for global cybercrime and illicit financial activities, and this trend is increasingly expanding worldwide. In the face of this cross-border crime threat, governments, regulators, and law enforcement agencies need to strengthen collaboration and build a more efficient international anti-money laundering and anti-fraud governance system. Especially in the context where virtual assets and cryptocurrencies are increasingly abused for money laundering and fraud, global information sharing and technological collaboration will be key pathways to curb related crimes. Only through comprehensive and multi-level international cooperation can we effectively address the increasingly complex global cybercrime issues and safeguard the security of the global financial system and social stability.

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