The Global Impact of Southeast Asia's Scam Centers and Illegal Online Markets

Recently, the United Nations Office on Drugs and Crime released a report that systematically analyzes the emerging forms of transnational organized crime in the Southeast Asia region. The report focuses on a new type of digital crime ecosystem centered around online fraud hubs, which integrates underground money laundering networks and illegal online market platforms.

The U.S. Treasury Department subsequently announced sanctions against the Karen National Liberation Army and its leaders, identifying them as a significant transnational criminal organization involved in and assisting with cyber fraud, human trafficking, and cross-border money laundering activities. The U.S. Financial Crimes Enforcement Network also listed Huione Group as a major money laundering concern, noting its involvement in laundering proceeds from virtual asset crimes for multiple criminal organizations.

The report points out that as the synthetic drug market in Southeast Asia becomes saturated, criminal groups are rapidly transforming, using fraud, money laundering, data trading, and human trafficking as means of profit. This trend initially concentrated in the Mekong sub-region and quickly spread to other areas with weak regulation.

Southeast Asia is gradually becoming the core of the criminal ecosystem

The Southeast Asian cybercrime industry is rapidly expanding, and the region is evolving into a key hub of the global criminal ecosystem. Criminal groups have established highly organized and industrialized crime networks by exploiting the region's weak governance, ease of cross-border collaboration, and technological vulnerabilities.

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. The organizational structure is increasingly "cellular," with scam points dispersed in residential buildings, homestays, and even within outsourced companies, demonstrating strong survival resilience and reconfiguration capabilities.

Systematic evolution of the fraud industry chain

Fraud groups have established a "vertically integrated criminal industry chain" from data collection, fraud execution to money laundering and cashing out. The upstream relies on social media platforms to obtain victim data; the midstream implements fraud through various means; the downstream relies on underground banks, over-the-counter trading, and stablecoin payments to complete fund laundering and cross-border transfers.

Human Trafficking and Labor Black Market

The expansion of the fraud industry is accompanied by systematic human trafficking and forced labor. The personnel in fraud parks come from multiple countries around the world, often falling victim to trafficking through false recruitment, suffering from violent control and even being resold multiple times. This "fraud economy + modern slavery" model has become a human support method that runs through the entire industry chain.

The digitalization and the ecological evolution of criminal technology continue.

Fraud groups possess strong technical adaptability, continuously upgrading counter-detection methods and constructing a criminal ecology of "technical independence + information black box." They generally deploy advanced communication, power, and network infrastructure to achieve "offline survival." At the same time, they extensively use encrypted communication, AI-generated content, automated phishing scripts, etc., to enhance fraud efficiency and camouflage.

Global Expansion Outside of Southeast Asia

Southeast Asian crime 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 crimes such as fraud and money laundering more internationalized.

Asia

• Taiwan, China has become a center for the research and development of scam technologies.
• Hong Kong and Macao become hubs for underground money laundering
• The losses from online fraud in Japan have increased significantly.
• Surge in cryptocurrency scams in South Korea
• Citizens of countries such as India and Pakistan are trafficked to Southeast Asia scam centers.

Africa

• Nigeria has become an important destination for Asian scam networks expanding into Africa.
• Zambia breaks up a large scam syndicate, arresting multiple foreign suspects
• Angola conducts a large-scale raid, detaining foreign nationals suspected of involvement in cybercrime.

South America

• Brazil passes a bill to legalize online gambling, but criminal groups still use unregulated platforms for money laundering.
• Peru has cracked down on a transnational crime gang, rescuing multiple trafficked workers.
• Mexican drug cartels launder money through underground money houses in Asia.

Middle East

• Dubai has become a global money laundering hub, involving multiple large money laundering cases.
• Turkey has become a safe haven for some criminal leaders to evade international arrest warrants.

Europe

• Real estate in London, UK has become a tool for money laundering.
• Georgia has become a "Little Southeast Asia" scam hub.

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 comprehensive services for various criminal entities.

Telegram black market

Illegal online markets and forums based on Telegram have become major activity venues for criminals in Southeast Asia. These platforms make criminal activities easier to implement and scale due to their accessibility, strong encryption features, instant messaging support, and automation capabilities.

Fully Light Guarantee

As a prototype platform for the early illegal market in Southeast Asia, Fully Light Guarantee attracted a large number of users. This platform not only served as a center for scams but also acted as a trading market for human trafficking, informal cross-border money laundering, and "black industry" technical support. Although its founding organization has been cracked down on, similar platforms continue to emerge and expand.

Huione Guarantee

Huione Guarantee has become one of the largest illegal online trading markets in the world in terms of users and trading volume. The platform is headquartered in Cambodia but has affiliated companies in multiple countries and regions. Huione has processed hundreds of billions of dollars in cryptocurrency transactions, becoming a one-stop service center for criminals to acquire various resources.

The group has also launched a series of proprietary cryptocurrency-related products, including exchanges, gambling platforms, blockchain networks, and stablecoins. Huione's expansion actions highlight that it is preparing for potential restrictions it may face in the future.

These illegal market platforms are showing a trend of moving overseas, diversifying financial products, and smartening technological tools, severely disrupting the transparency of on-chain transactions and eroding the trust foundation of the global crypto asset ecosystem.

Transnational Criminal Networks and Global Law Enforcement Cooperation

Some transnational criminal groups in Southeast Asia use complex business structures to conceal illegal activities, particularly in the areas of money laundering and online fraud. These organizations flexibly transfer funds across different regulatory systems through multiple nationalities, companies and assets located in various places, and cryptocurrencies, significantly increasing the difficulty of transnational financial regulation and criminal investigation tracing.

In the face of such cross-border crime threats, governments, regulatory agencies, and law enforcement authorities of various countries urgently need to strengthen collaboration and build a more efficient international anti-money laundering and anti-fraud governance system. It is recommended to promote international cooperation and the construction of on-chain governance systems from the following aspects:

• Promote the global unification of anti-money laundering ( KYC ) standards for crypto assets.
• Strengthen cooperation on cross-border asset freezing and criminal tracing.
• Establish multilateral mechanisms to sanction "high-risk platforms" and "criminal guarantee markets"
• Strengthen tactical collaboration between law enforcement agencies and on-chain monitoring companies, exchanges.

Conclusion and Recommendations

To address the global threat posed by cybercrime and illegal financial activities in the Southeast Asian region, the following measures need to be taken:

1. Raise awareness and understanding: Enhance the understanding of risks such as online scams and underground money houses, and strengthen anti-corruption measures.

2. Strengthen the regulatory framework: Improve regulations against money laundering, virtual assets, special economic zones, and online gambling, and enhance asset recovery and victim protection.

3. Enhance the technical and operational capabilities of law enforcement agencies: develop monitoring and investigation technologies, strengthen international cooperation.

4. Promote overall government response and inter-agency coordination: establish a national coordination mechanism and strengthen cooperation among various departments.

5. Promote pragmatic and effective regional cooperation: strengthen cross-border information sharing and joint actions, and implement risk-based response measures.

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.