On October 14th, the US Treasury Department’s Office of Foreign Assets Control (OFAC) announced1 it had seized 127.271 bitcoins, worth more than $15 billion, belonging to Prince Holding Group2, a Cambodia-based investment conglomerate involved in a crypto money laundering scheme. Along with the historic seizure, OFAC has designated Prince Group as a Transnational Criminal Organization and imposed sanctions on 146 individuals connected with the firm, targeting in particular the company’s Chairman and CEO, Chen Zhi. Prince Group is accused of having run more than 10 scam compounds across Cambodia, where thousands of people are held prisoners and forced to run industrial-scale fraud operations3.
One of the most concerning aspects of this story is the embedded high-level state corruption that has allowed a transnational criminal syndicate to operate a sophisticated underground financial scheme under the façade of legitimate investment businesses, with repercussions felt across the world.
Beyond the record-breaking numbers, this story raises a larger question about the future of digital governance. As financial systems become increasingly digitalised, cryptocurrencies and online platforms are not just reshaping economies; they are redistributing power. When transparency fails and regulation lags behind, technology becomes a catalyst for corruption, exploitation, and instability.
From Casinos to Scam Cities
In order to understand how South East Asia has become the main international hub for online scams, we have to take a step back in time. The Special Administrative Region of Macau, in China, is the only location in the country where the gambling industry is legal. Along with licensed casinos, Macau hosted a large number of junket operators, which attracted the attention of crime syndicates who were looking for easy ways to launder and transfer money. In fact, junket operators would serve as banking intermediaries for customers seeking to evade capital controls. A 2024 report4 published by UNODC illustrates the evolution of this industry.
When China tightened its regulations to combat money laundering and obscure capital outflows, illegal casino and junket operations moved into the Mekong region, building entire cities and compounds while taking advantage of the existence of several underegulated Special Economic Zones in Cambodia and Laos, and of areas lacking the rule of law in Myanmar.
The post-pandemic surge in online gambling served as a further push in the expansion of this phenomenon, which, along with betting, specialized in industrial-scale online scam operations. Human trafficking became a major issue in this area, where hundreds of thousands of people from Asia and Africa are lured with fake job postings and forced to commit online fraud under the threat of violence.
Cryptocurrencies Are Enablers of Organized Crime
When there are massive amounts of illegal profits, money laundering becomes crucial for introducing funds into the legal economy. Typically, money laundering would occur in three phases: a) Placement of illicit funds into a legal business or the financial system; b) Layering the funds, distancing them from the illegal source, and making it difficult to trace; c) Full integration into the legal economy.
The accessibility and portability that are intrinsic to cryptocurrencies made this process even easier, allowing for quick and borderless transactions. For this reason, cryptocurrencies have been identified in reports as enablers5 of organized crime.
“Stablecoins remain the preferred asset because they preserve value while moving seamlessly across borders. Networks with lower fees and higher throughput are favored for micro-layering and frequent transfers”, said Ari Redbord, Global Head of Policy and Government Affairs at blockchain intelligence firm TRM Labs.
The use of cryptocurrencies for money laundering and illegal payments is not limited to Southeast Asia. Chinese networks developed sophisticated schemes involving crypto money laundering for Mexican Cartels, acting as a bridge6 with Chinese nationals interested in purchasing US dollars outside of China. In addition, cryptocurrencies are among the preferred payment methods to purchase fentanyl and methamphetamine precursors7 from Chinese chemical companies.
Latin America is a region particularly vulnerable8 due to weak financial regulations, and several criminal groups, including the Brazilian PCC (Primeiro Comando da Capital) and the Central American MS-13, are switching to crypto money laundering to avoid seizures of their finances.
Europe has not been spared from these dynamics as well, with an EUROPOL report dating back to 20219, which was already highlighting the increasing use of crypto in money laundering and drug trafficking.
A Growing Market That Fuels Instability
The scale of illegal transactions relying on crypto infrastructure grows year by year. Stablecoin inflows to high-risk addresses in 2024 amounted10 to $649 billion, with a high percentage related to online gambling platforms, which handled $217.84 billion in stablecoin payments for the year 2024.
The convergence of interests of criminal networks involved in online gambling, human trafficking, industrial-scale digital fraud, and underground banking has fueled corruption and eroded state sovereignty across the entire Mekong region (Cambodia, Myanmar, and Laos), with consequences felt all around the world. These crime syndicates are proving to be resilient to authorities’ crackdowns, continuing to move and build business parks across countries, exploiting their vulnerabilities in governance.
Countries that establish Special Economic Zones to attract foreign investment and development are particularly vulnerable to criminal infiltration into the legitimate economy. The high-level connections that ring leaders like Chen Zhi are able to establish with government and authorities’ officials allow them to exert political influence and be protected from law enforcement.
The compounds in scam cities host hundreds of thousands of people forced into criminality, in conditions that resemble modern slavery. The human trafficking behind these schemes has reached massive proportions and takes advantage of the lack of economic opportunities for young professionals in different areas of the world. On the other side, the economic damage inflicted on victims of online scams is quantifiable in billions of USD every year.
Follow The Blockchain
The gaps in governance that facilitate traditional money laundering are the same ones exploited in financial schemes that rely on cryptocurrencies. On this issue, we can say that cryptocurrencies are accelerators of money laundering. UNODC has underlined11 the necessity for specific regulations and oversight of digital financial systems, which is essential both at the national and regional levels.
The recent seizure and sanctions targeting Prince Holding Group have shown that scam networks are not untouchable.
“For those new to this space, it’s important to understand that blockchains are not anonymous. They are pseudonymous—every transaction is public and permanent. Once wallets linked to a scam network are tagged, the trail is permanent, and law enforcement can follow the flow upstream to operators and assets.”, commented Redbord.
“In many ways, transparency is the superpower of the blockchain—it turns what criminals see as an advantage into a tool for accountability.”
Along with cross-border cooperation between authorities, targeted regulation on Special Economic Zones and the casino industry, the key to combating these syndicates might be in the same tools they rely on for laundering their profits.
A more uniform legislation on cryptocurrencies at the international level has the potential to reclaim blockchain as a tool for accountability and governance stability, not just enforcement.
In the end, the future of digital peace will depend on whether technologies like blockchain serve as instruments of exploitation or evolve into tools of accountability, shaping financial systems that strengthen, rather than erode, the foundations of trust and democratic governance.
References
- U.S. Department of the Treasury. (2025, October 14). U.S. and U.K. take largest action ever targeting cybercriminal networks in Southeast Asia [Press release]. https://home.treasury.gov/news/press-releases/sb0278
- Prince Holding Group. (n.d.). Prince Holding Group [Corporate website]. https://www.princeholdinggroup.com/
- Burgess, M., & Greenberg, A. (2025, October 14). Feds seize record-breaking $15 billion in Bitcoin from alleged scam empire. WIRED. https://www.wired.com/story/feds-seize-record-breaking-15-billion-in-bitcoin-from-alleged-scam-empire/
- United Nations Office on Drugs and Crime. (2024, January). Casinos, money laundering, underground banking, and transnational organized crime in East and Southeast Asia: A hidden and accelerating threat (Technical policy brief). Regional Office for Southeast Asia and the Pacific. https://www.unodc.org/roseap/uploads/documents/Publications/2024/Casino_Underground_Banking_Report_2024.pdf
- Collins, J. (2022, June 16). Crypto, crime and control: Cryptocurrencies as an enabler of organized crime. Global Initiative Against Transnational Organized Crime. https://globalinitiative.net/wp-content/uploads/2022/06/GITOC-Crypto-crime-and-control-Cryptocurrencies-as-an-enabler-of-organized-crime.pdf
- TRM Labs. (2025, January 21). Understanding the use of cryptocurrencies by cartels [Blog post]. https://www.trmlabs.com/es/resources/blog/understanding-the-use-of-cryptocurrencies-by-cartels
- Dudley, S., Lara, J., López-Aranda, J., & Dittmar, V. (2024, May 8). How Mexico loses the precursor chemical money trail. InSight Crime. https://insightcrime.org/investigations/mexico-loses-precursor-chemical-money-trade/
- Farah, D., & Richardson, M. (2023, March 20). The growing use of cryptocurrencies by transnational organized crime groups in Latin America. Georgetown Journal of International Affairs. Retrieved from https://gjia.georgetown.edu/2023/03/20/the-growing-use-of-cryptocurrencies-by-transnational-organized-crime-groups-in-latin-america/
- Europol. (2021). Cryptocurrencies: Tracing the evolution of criminal finances (Europol Spotlight Report). Luxembourg: Publications Office of the European Union. https://www.europol.europa.eu/cms/sites/default/files/documents/Europol%20Spotlight%20-%20Cryptocurrencies%20-%20Tracing%20the%20evolution%20of%20criminal%20finances.pdf
- Bitrace. (2025, May 2). Bitrace releases the 2025 Crypto Crime Report [Blog post]. https://blog.bitrace.io/bitrace-releases-the-2025-crypto-crime-report/
- United Nations Office on Drugs and Crime. (2025). Inflection Point: Global implications of scam centres, underground banking and illicit online marketplaces in Southeast Asia (ROSEAP Publication). https://www.unodc.org/roseap/uploads/documents/Publications/2025/Inflection_Point_2025.pdf
