Malaya Ruiz
The United Nations Office on Drugs and Crime (UNODC) recently highlighted the increasing use of cryptocurrency and similar high-risk virtual assets in facilitating criminal activities across Southeast Asia.
In its latest report, the UNODC detailed how various criminal organizations are using virtual asset service providers for money laundering, drug trafficking, and other illicit activities. This scenario underscores the urgent need for regulatory frameworks to mitigate such risks.
Southeast Asia: The Emerging Epicenter of Virtual Asset-Driven Crime Amid Technological Gaps
The report makes it clear that the use of virtual assets is becoming widespread in Southeast Asia. However, it is not always for good reason. Top-secret criminals are capitalizing on an underground network that includes unregulated casinos and illegal gambling platforms that use cryptocurrency. This growth enables criminal activities without any oversight.
Furthermore, the anonymity of cryptocurrencies and the rapid growth of digital finance have created a conducive environment for crime. Southeast Asia is particularly vulnerable because regulations often lag behind in technological advancements. The report points out that criminals take advantage of these gaps. They make use of high-risk virtual asset providers (VASPs) to hide the sources of their illegal gains.
The pandemic has led to a significant rise in illegal cyber activities. Countries in the Mekong region—Myanmar, Cambodia, and Laos—are now prime locations for crime syndicates. They engage in romance investment schemes, cryptocurrency fraud, money laundering, and illicit gambling activities.
The Human Cost of Crime: Forced Labor and Exploitation in Southeast Asia’s Criminal Landscape
Those are not the only countries connected to the criminal underworld of Southeast Asia. Devastatingly, in some parts of the region, these criminal financial groups carry a significant human toll. The best example is the case of Philippine Offshore Gaming Operations (POGOs). Some of these establishments, while licensed by the government, mask love and cryptocurrency scams that exploit workers.
In July, Benedikt Hofmann, the UNODC Deputy Regional Representative for Southeast Asia and the Pacific, revealed the presence of a scam farm north of Manila, the capital of the Philippines. One of the buildings houses the gambling operations. While officially registered and monitored by regulators, the intermediary structures—invisible on official records—are where much of the exploitation occurs.
“The scale and sophistication of the compound is surprising. This does not look very different from a well-established tech company. Some 700 people were discovered on this compound when it was raided in March…,” Hofmann said. He remarked on a striking contrast. Many people were compelled to live and work there, while those in charge of the compound possess great wealth.
Former Bybit manager Abhyudoy Das shared a report on X, which revealed that thousands of Indian nationals fall for fake job offers. They end up trapped within cyber slavery and cryptocurrency fraud schemes in Southeast Asia. These individuals frequently face pressure to engage in scams such as crypto fraud, phishing, and pig butchering. Many of these scams specifically target victims in their home country of India. They find themselves forced to impersonate law enforcement to extort money from drug parcel scams. An estimated 45% of cybercrimes against Indians reportedly originate from Southeast Asia.
Southeast Asia’s Battle Against the Escalating Threat of Virtual Asset-Related Crimes
Reflecting on this grim situation, UNODC Regional Representative Masood Karimipour offered insights into the intensifying risks of Southeast Asia being the ground zero for scams related to virtual assets. He emphasized how vital it is to understand the magnitude and global implications of this threat.
Southeast Asian criminal organizations are increasingly involved in virtual asset activities. This poses a major threat to stability and security in the region, according to the UNODC. As money laundering, drug trafficking, and illegal gambling flourish within an environment of inadequate regulation, the exploitation of individuals caught in these operations has reached alarming levels.
Countries like the Philippines exemplify the dark side of this trend, where licensed gambling operations often serve as fronts for more sinister activities. In light of these findings, there is a need for urgent action to curb the crime wave involving virtual assets and protect those affected by these ruthless syndicates.
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Read More
- Asian Crime Groups Exploit Tech for Cyber-Enabled Fraud – Study
- India Battling Cyber Slavery and Human Trafficking in Southeast Asia
- Cambodian Journalist Mech Dara Charged After Exposing Crypto Scams
Malaya has positions in SHIB, ETH, USDT, MATIC, etc. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
