US Sanctions Southeast Asia Crypto Scammers via Magnitsky Act

The US imposes cryptocurrency-related penalties on Southeast Asian cryptocurrency scammers associated with $10B cyber scamming and human trafficking under the Magnitsky Act.

The US Treasury levied new sanctions on crypto fraudsters in Southeast Asia under the Magnitsky Act. The move is against a vast installation that takes advantage of Americans and contributes to modern slavery. 

In 2024, Americans lost upwards of 10 billion dollars to these scams, a 66 percent increase over the previous year. This was occasioned by the transnational criminal groups operating primarily in Burma and Cambodia.

The cyber scams of Southeast Asia involve compelled labor and coercion. Fraudsters defraud their victims by enticing them to invest in false virtual currencies. 

The Office of Foreign Assets Control (OFAC) in the Department of the Treasury listed 19 people and organizations that supported these scams. 

The objective is to major scam centers guarded by the Karen National Army (KNA) in the Burmese region of Shwe Kokko and several operations in Cambodia.

Scam Centers Run by Armed Groups and Business Tycoons

The KNA shields scam centers that make illegal profits by holding and trafficking forced laborers. Another forced labor and violence scam is run in Yatai New City, a compound in Burma. 

The primary developer is She Zhijiang, and KNA leaders approve of the human rights violations and trafficking.

Hotels and casinos in Cambodia have been transformed into scam centers. There are companies like T C Capital and K B Hotel, where the victims are exploited in complexes. 

These businesses are owned by investors who have a history connected to money laundering and organized crime. The Treasury has also imposed sanctions on Cambodian financial institutions engaging in the laundering of scam proceeds.

A Coordinated Global Effort Using Executive Orders

The Treasury has issued several Executive Orders, such as the Magnitsky Act, to designate these networks to perpetrate cybercrime, human rights abuses, and destabilize regional peace. 

The sanctions prevent any US-based financial operations of these individuals and their organizations. Having been signed by Trump as a law in 2017, the Magnitsky Act focuses on severe human rights violations, diminishing the global scam system of cryptocurrency fraud and forced labor.

John K. Hurley, the Under Secretary of the Treasury, Terrorism and Financial Intelligence, noted that cyber scams in Southeast Asia threaten the financial security of Americans and provide a source of continuation to modern slavery. 

The US is keen to disrupt such criminal enterprises by imposing tough sanctions and enforcement measures.