The Southeast Asian Criminal Ecosystem and Global Expansion: An Analysis of the UNODC Report

Background

In April 2025, the United Nations Office on Drugs and Crime ( UNODC ) released a report titled "The Global Impact of Southeast Asia's Scam Centers, Underground Money Laundering, and Illegal Online Markets." The report systematically analyzes the emerging forms of transnational organized crime in the Southeast Asian region, with a particular focus on a new digital crime ecosystem centered around online scam centers, integrating underground money laundering networks and illegal online market platforms.

On May 5, 2025, the U.S. Department of the Treasury announced sanctions against the Karen National Liberation Army (KNA) and its leaders and relatives, designating them as a significant transnational criminal organization involved in and facilitating cyber fraud, human trafficking, and cross-border money laundering activities. On May 1, the Financial Crimes Enforcement Network also identified Huione Group as a primary money laundering concern, noting it as a key channel for North Korean hacker organizations and Southeast Asian scam groups to launder proceeds from virtual asset crimes.

The report points out that as the synthetic drug market in Southeast Asia becomes saturated, criminal groups are rapidly transforming their methods of profit-making to include fraud, money laundering, data trading, 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 erupted in the Mekong sub-region and quickly spread to weakly regulated areas in South Asia, Africa, Latin America, forming a distinct "gray export".

The UNODC warns that this type of criminal pattern has become highly systematized, specialized, and globalized, and relies on emerging technologies that continue to evolve, becoming an important blind spot in international security governance. In the face of the ongoing spreading threat, the report calls on governments to immediately strengthen the regulation of virtual assets and illegal financial channels, promote on-chain intelligence sharing and cross-border cooperation mechanisms among law enforcement agencies, and establish a more efficient anti-money laundering and anti-fraud governance system to curb this rapidly developing global security risk.

Southeast Asia is gradually becoming the core of the criminal ecosystem

With the rapid expansion of the Southeast Asian cybercrime industry, the region is gradually evolving into a key hub of the global crime ecosystem. Criminal groups are leveraging the region's weak governance, convenient cross-border collaboration, and technological vulnerabilities to establish highly organized and industrialized crime networks. From Mrauk U in Myanmar to Sihanoukville in Cambodia, scam centers are not only large in scale but also continuously evolving, employing the latest technologies to evade crackdown and obtaining cheap labor through human trafficking.

High liquidity and adaptability coexist

Southeast Asian cybercrime groups exhibit high mobility and strong adaptability, capable of quickly adjusting their activity locations based on law enforcement pressure, political situations, or geopolitical conditions. For example, after Cambodia cracked down on online gambling, many scam gangs moved to special economic zones like Shan State in Myanmar and the Golden Triangle in Laos, and then relocated again to the Philippines and Indonesia due to the turmoil in Myanmar and regional joint law enforcement, forming a cycle of "crackdown---relocation---returning". These gangs disguise themselves by utilizing physical venues such as casinos, border economic special zones, and resorts, while also "sinking" into more remote areas and border regions where law enforcement is weak to evade concentrated crackdowns. Furthermore, the organizational structure is becoming increasingly "cellular", with scam points dispersed into residential buildings, guesthouses, and even within outsourced companies, demonstrating strong survival resilience and redeployment capabilities.

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 data collection, fraud execution, and money laundering. The upstream relies on platforms like Telegram to obtain global victim data; the midstream implements scams through methods such as "pig butchering," "false law enforcement," and "investment inducement"; the downstream relies on underground banks, OTC trading, and stablecoin payments like USDT( to complete money laundering and cross-border transfers. According to UNODC data, cryptocurrency fraud caused economic losses of over $5.6 billion in the United States alone in 2023, with an estimated $4.4 billion attributed to the so-called "pig butchering" scams most prevalent in Southeast Asia. The scale of fraud profits has reached "industrial level," forming a stable profit closed loop that attracts more and more transnational criminal forces to participate.

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) Human Trafficking and Labor Black Market

The expansion of the scam industry is accompanied by systemic human trafficking and forced labor. Personnel in scam parks come from over 50 countries worldwide, especially young people from China, Vietnam, India, Africa, and other regions, who are often deceived into entering the country under false job postings for "high-paying customer service" or "technical positions," with their passports confiscated, subjected to violent control, and even resold multiple times. In early 2025, over a thousand foreign victims were repatriated in a single instance from the Kayin State in Myanmar. This "scam economy + modern slavery" model is no longer an isolated phenomenon, but a human support method that permeates the entire industry chain, resulting in a serious humanitarian crisis and diplomatic challenges.

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) The digitalization and the ecological evolution of criminal technology continue.

Fraud groups possess strong technical adaptability, continuously upgrading their counter-surveillance methods and constructing a criminal ecology of "technical independence + information black box." On one hand, they generally deploy infrastructure such as Starlink satellite communications, private power grids, and internal network systems, breaking away from local communication control to achieve "offline survival"; on the other hand, they heavily utilize encrypted communications like Telegram end-to-end encrypted groups, AI-generated content Deepfake, virtual anchors, and automated phishing scripts to enhance fraud efficiency and disguise. Some organizations have also launched "Scam-as-a-Service" platforms to provide other groups with technical templates and data support, promoting the productization and servitization of criminal activities. This continuously 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 crime syndicates are no longer limited to local operations but are expanding globally, establishing new bases of operation 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. Crime syndicates exploit local regulatory loopholes, corruption issues, and weaknesses in the financial system to rapidly penetrate new markets.

( Asia

• Taiwan, China: Becoming a research and development center for scam technologies, with some criminal groups establishing "white label" gambling software companies in Taiwan to provide technical support for Southeast Asia's scam centers.

• Hong Kong and Macau: Underground money house hubs, assisting cross-border capital flows, with some casino intermediaries involved in money laundering ), such as the Sun City Group case (.

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

• South Korea: Cryptocurrency scams are on the rise, with criminal groups using the Korean won stablecoin ) like KRW-pegged USDT( for money laundering.

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

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

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) Africa

• Nigeria: Nigeria has become an important destination for Asian scam networks diversifying into Africa. In 2024, Nigeria dismantled a large fraud syndicate, arresting 148 Chinese citizens and 40 Filipinos involved in cryptocurrency scams.

• Zambia: In April 2024, Zambia dismantled a fraud ring, arresting 77 suspects, including 22 Chinese fraud leaders, who were sentenced to a maximum of 11 years in prison.

• Angola: At the end of 2024, Angola conducted a large-scale raid, detaining dozens of Chinese citizens on suspicion of involvement in online gambling, fraud, and cybercrime.

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) South America

• Brazil: In 2025, the "Online Gambling Legalization Act" was passed, but criminal groups still use unregulated platforms for money laundering.

• Peru: A Taiwanese criminal gang "Red Dragon Group" has been dismantled, rescuing more than 40 Malaysian workers.

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

( Middle East

• Dubai: Becoming a global money laundering center. The main culprit of 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 workers to Southeast Asia.

• Turkey: Some Chinese fraud masterminds obtain Turkish passports through investment immigration programs to evade international arrest.

) Europe

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

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

Emerging Illicit Online Markets and Money Laundering Services

As traditional criminal methods are being cracked down on, Southeast Asian criminal groups 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 criminal entities, including scam groups, human traffickers, and drug dealers, with tools for fraud, stolen goods, and more.