A new United Nations report has highlighted the growing role of the Southeast Asian casino industry in facilitating cyber fraud and large-scale money laundering by organized crime networks. This expansion is closely linked with the region’s criminal ecosystem and includes the proceeds from online scams, notably pig-butchering schemes, where victims are enticed into fraudulent investments. The report indicates that these scams often originate from casinos situated in less regulated areas of countries like Laos and Myanmar. It is believed that hundreds of thousands of individuals have been trafficked into these regions, coerced into committing telecommunications fraud.
Jeremy Douglas, the regional representative for Southeast Asia and the Pacific at the United Nations Office on Drugs and Crime, notes in the report’s forward, “The acceleration of globalized crime networks in the Mekong, aided by technology, has significantly increased criminal revenue streams.” This evolution has led to the development of sophisticated systems and infrastructure for laundering large sums of money, including cryptocurrencies. The phenomenon is not entirely new. The report references instances where Philippines-based casinos were implicated in laundering about $81 million stolen by North Korea’s Lazarus hacking group from Bangladesh Bank. However, the industry has seen considerable growth, particularly after 2019, with over 340 land-based casinos reported in early 2022. With the onset of the pandemic and the halt in tourism, many casinos shifted focus to cyber fraud operations.
The UN report also points to a substantial number of online casinos engaged in money laundering. The ease of setting up online casino operations with minimal technical expertise and capital, facilitated by cryptocurrencies, mirror websites, and “white-label” service providers, has contributed to this trend. Online gambling platforms have become a prevalent channel for cryptocurrency-based money laundering. Funds are channeled into these platforms, sometimes using a network of affiliates, and then cashed out or bet in a way that integrates them into the formal financial system, thus laundering the money. The report also highlights the role of Tether (USDT) as a preferred cryptocurrency in the cyber fraud industry, favored for its stability and transaction anonymity. An independent audit found over $17 billion in USDT transactions linked to various illegal activities over a year.
Notably, in November 2023, the U.S. Department of Justice and Tether froze $225 million in USDT related to Southeast Asia-based pig butchering scams. The report includes a case study of the Fully Light business conglomerate in Myanmar’s Kokang region, involved in casinos and facilitating various illegal activities, including cybercrime and money laundering. China’s recent crackdown on cross-border cybercriminal operations in Myanmar, coupled with a successful rebel offensive in the Kokang region, has led to the arrest and repatriation of thousands involved in the industry. However, the report suggests that criminal networks continue to adapt and relocate, maintaining their operations under pressure.
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#SoutheastAsia #CasinoIndustry #CyberFraud #MoneyLaundering #OrganizedCrime #OnlineScams #PigButchering #Cryptocurrency #UNReport #TelecommunicationsFraud #GamingRegulation #CriminalNetworks #Cybercrime #Tether #USDT
A new United Nations report has highlighted the growing role of the Southeast Asian casino industry in facilitating cyber fraud and large-scale money laundering by organized crime networks. This expansion is closely linked with the region’s criminal ecosystem and includes the proceeds from online scams, notably pig-butchering schemes, where victims are enticed into fraudulent investments. The report indicates that these scams often originate from casinos situated in less regulated areas of countries like Laos and Myanmar. It is believed that hundreds of thousands of individuals have been trafficked into these regions, coerced into committing telecommunications fraud.
Jeremy Douglas, the regional representative for Southeast Asia and the Pacific at the United Nations Office on Drugs and Crime, notes in the report’s forward, “The acceleration of globalized crime networks in the Mekong, aided by technology, has significantly increased criminal revenue streams.” This evolution has led to the development of sophisticated systems and infrastructure for laundering large sums of money, including cryptocurrencies. The phenomenon is not entirely new. The report references instances where Philippines-based casinos were implicated in laundering about $81 million stolen by North Korea’s Lazarus hacking group from Bangladesh Bank. However, the industry has seen considerable growth, particularly after 2019, with over 340 land-based casinos reported in early 2022. With the onset of the pandemic and the halt in tourism, many casinos shifted focus to cyber fraud operations.
The UN report also points to a substantial number of online casinos engaged in money laundering. The ease of setting up online casino operations with minimal technical expertise and capital, facilitated by cryptocurrencies, mirror websites, and “white-label” service providers, has contributed to this trend. Online gambling platforms have become a prevalent channel for cryptocurrency-based money laundering. Funds are channeled into these platforms, sometimes using a network of affiliates, and then cashed out or bet in a way that integrates them into the formal financial system, thus laundering the money. The report also highlights the role of Tether (USDT) as a preferred cryptocurrency in the cyber fraud industry, favored for its stability and transaction anonymity. An independent audit found over $17 billion in USDT transactions linked to various illegal activities over a year.
Notably, in November 2023, the U.S. Department of Justice and Tether froze $225 million in USDT related to Southeast Asia-based pig butchering scams. The report includes a case study of the Fully Light business conglomerate in Myanmar’s Kokang region, involved in casinos and facilitating various illegal activities, including cybercrime and money laundering. China’s recent crackdown on cross-border cybercriminal operations in Myanmar, coupled with a successful rebel offensive in the Kokang region, has led to the arrest and repatriation of thousands involved in the industry. However, the report suggests that criminal networks continue to adapt and relocate, maintaining their operations under pressure.
Discover top supply chain news stories at The Supply Chain Report. For international trade resources, head to ADAMftd.com.
#SoutheastAsia #CasinoIndustry #CyberFraud #MoneyLaundering #OrganizedCrime #OnlineScams #PigButchering #Cryptocurrency #UNReport #TelecommunicationsFraud #GamingRegulation #CriminalNetworks #Cybercrime #Tether #USDT
