UN Report Reveals Global Impact of Southeast Asia's Online Scam Centers

In April 2025, the United Nations Office on Drugs and Crime released a report titled "Global Impact of Southeast Asia's Fraud Centers, Underground Banks, and Illegal Online Markets." The report analyzes the emerging transnational organized crime forms in Southeast Asia, focusing on a new type of digital crime ecology centered around online fraud, integrating money laundering networks of underground banks and platforms of illegal online markets.

Shortly after the report was released, on May 5, 2025, the U.S. Department of the Treasury announced sanctions against the Karen National Liberation Army of Myanmar and its leaders, designating them as a significant transnational criminal organization involved in online fraud, human trafficking, and cross-border money laundering activities. The U.S. Financial Crimes Enforcement Network also identified the Huione Group as a primary money laundering concern, noting that it serves as a key channel for the laundering of proceeds from virtual asset crimes linked to North Korean hacker organizations and Southeast Asian scam groups.

As the synthetic drug market in Southeast Asia becomes saturated, criminal groups are rapidly transforming their profit-making methods to include fraud, money laundering, data trafficking, and human trafficking. They are building a cross-border, high-frequency, low-cost black market system through online gambling, virtual asset service providers, Telegram underground markets, and cryptocurrency payment networks. This trend initially concentrated in the Mekong sub-region and quickly spread to South Asia, Africa, Latin America, and other areas with weak regulation.

The United Nations warns that this type of criminal pattern has become highly systematized, specialized, and globalized, and continues to evolve relying on emerging technologies, becoming an important blind spot in international security governance. The report calls on governments to strengthen regulation of virtual assets and illegal financial channels, promote on-chain intelligence sharing and cross-border collaboration mechanisms among law enforcement agencies, and establish a more efficient anti-money laundering and anti-fraud governance system.

Southeast Asia is gradually becoming the core of the criminal ecosystem

The Southeast Asian cybercrime industry is rapidly expanding, and the region is gradually evolving into a key hub of the global criminal ecosystem. Criminal groups are taking advantage of weak governance, ease of cross-border collaboration, and technological vulnerabilities to establish highly organized and industrialized crime networks. Fraud centers are large in scale, continuously evolving, utilizing the latest technologies to evade crackdown, and acquiring cheap labor through human trafficking.

High liquidity and adaptability coexist

Southeast Asian cybercrime groups exhibit high mobility and strong adaptability, able to quickly adjust their operational locations based on law enforcement pressure, political situations, or geopolitical conditions. For example, after Cambodia cracked down on online gambling, many scam gangs relocated to special economic zones such as Shan State in Myanmar and the Golden Triangle in Laos, only to later migrate again to the Philippines and Indonesia due to the turmoil in Myanmar and regional joint law enforcement, forming a cycle of "crackdown-move-backflow."

These gangs disguise themselves through physical locations such as casinos, border economic special zones, and resorts, while "sinking" into more remote areas and border regions with weak law enforcement to evade concentrated crackdowns. Their organizational structure is increasingly becoming "cellular," with scam points dispersed to residential buildings, guesthouses, and even inside outsourced companies, demonstrating strong resilience and the ability to reorganize.

Systematic evolution of the fraud industry chain

Fraud groups are no longer loose gangs, but have established a "vertically integrated criminal industry chain" that spans from data collection, fraud execution to money laundering and cashing out. The upstream relies on platforms like Telegram to obtain data on global victims; the midstream implements fraud through methods such as "pig butchering," "fake law enforcement," and "investment inducement"; the downstream completes fund cleaning and cross-border transfer through underground banks, OTC trading, and stablecoin payments.

According to data from the United Nations, the economic losses caused by cryptocurrency scams in the United States alone exceeded $5.6 billion in 2023, with an estimated $4.4 billion attributed to the so-called "pig-butchering" scams that are most prevalent in Southeast Asia. The scale of scam profits has reached "industrial level," forming a stable profit loop that attracts more and more transnational criminal forces to participate.

Human Trafficking and Labor Black Market

The expansion of the scam industry is accompanied by systemic human trafficking and forced labor. The personnel in scam parks come from over 50 countries worldwide, particularly young people from China, Vietnam, India, Africa, and other regions, who are often deceived into entering the country by false job postings for "high-paying customer service" or "technical positions," having their passports confiscated, suffering from violent control, and even being resold multiple times. At the beginning of 2025, more than a thousand foreign victims were repatriated in one instance from the Karen State in Myanmar. This "scam economy + modern slavery" model is no longer an isolated phenomenon but a human support method that runs through the entire industrial chain, leading to a serious humanitarian crisis and diplomatic challenges.

The digitalization and evolution of criminal technology ecosystems continues.

Fraud groups possess a strong technical adaptability, constantly upgrading counter-surveillance measures and constructing a criminal ecosystem of "technical independence + information black box." On one hand, they commonly deploy infrastructure such as Starlink satellite communication, private power grids, and intranet systems to detach from local communication control, achieving "offline survival"; on the other hand, they extensively use encrypted communication, AI-generated content, and automated phishing scripts to enhance fraud efficiency and disguise.

Some organizations have also launched "Scam-as-a-Service"( platforms, providing technical templates and data support for other gangs, promoting the productization and servitization of criminal activities. This evolving technology-driven model is significantly undermining the effectiveness of traditional law enforcement methods.

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Global Expansion Beyond Southeast Asia

Southeast Asian criminal groups have expanded 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 criminal activities such as fraud and money laundering more internationalized. Criminal groups exploit local regulatory loopholes, corruption issues, and weaknesses in the financial system 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: Underground money house hub, assisting cross-border capital flow, with some casino intermediaries involved in money laundering.

• Japan: In 2024, losses from online fraud are expected to increase by 50%, with some cases involving Southeast Asian fraud centers.

• South Korea: Cryptocurrency scams surge as criminal groups use the won-backed stablecoin for money laundering.

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

• Pakistan and Bangladesh: becoming a source of labor for scams, with some victims being lured to Dubai and then sold to Southeast Asia.

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( Africa

• Nigeria: It 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, a fraud syndicate was dismantled, resulting in the arrest of 77 suspects, including 22 Chinese fraud leaders, who were sentenced to a maximum of 11 years in prison.

• Angola: A large-scale crackdown will take place at the end of 2024, with dozens of Chinese citizens detained on suspicion of involvement in online gambling, fraud, and cybercrime.

) South America

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

• Peru: Bust Taiwanese criminal gang "Red Dragon Group", rescuing more than 40 Malaysian laborers.

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

Middle East

• Dubai: Becoming a global money laundering center. The mastermind behind the $3 billion money laundering case in Singapore purchased luxury homes in Dubai, using shell companies to transfer funds. Scam groups established "recruitment centers" in Dubai to lure laborers to Southeast Asia.

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

Europe

• UK: London's real estate has become a tool for money laundering, with some funds coming from Southeast Asian scam proceeds.

• Georgia: A "Little Southeast Asia" scam center has emerged in Batumi, where criminal groups are using casinos and football clubs for money laundering.

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Emerging Illegal Online Markets and Money Laundering Services

As traditional criminal methods are being cracked down on, 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, providing not only fraud toolkits, stolen data, and AI deepfake software to criminal entities such as fraudsters, human traffickers, and drug dealers, but also enabling rapid capital flow through cryptocurrencies, underground money houses, and Telegram black markets, posing unprecedented challenges to global law enforcement agencies.

( Telegram black market

Criminals are increasingly globalizing the range of services offered on numerous illegal online markets and forums based on Telegram in Southeast Asia. Compared to the dark web, Telegram makes it easier for criminals in Southeast Asia to carry out scams and scale their activities due to its accessibility, mobile-first design, robust encryption features, instant messaging capabilities, and automated operations via bots.

In recent years, some of the most powerful and influential criminal networks in the region have taken control of several Telegram-based platforms, which have become the main venues for local criminals and service providers to gather, communicate, and conduct business. These illegal markets are often interconnected with cryptocurrency exchanges controlled by the same organizations, where a large number of merchants are gathered, specializing in the sale of stolen data, hacking tools, malware, as well as various underground banks, money laundering, and cybercrime services, while other criminals profit from these services.

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