By Kristina Amerhauser | Audrey Thill
Cyber scam operations in Southeast Asia rely heavily on information and communications technology, financial fraud, trafficking for forced criminality, corruption and elite capture. This creates what can be described as ‘compound crimes’, reflecting how cyber scam operations are both based in physical compounds and involve multiple criminal markets. While estimates vary, the scale of funds defrauded from scam victims each year is in the tens of billions of US dollars and trending upward. In addition, illicit proceeds are generated from exploitation of trafficked persons, illegal gambling and corruption. The scale of illicit financial flows represents a clear threat to national economies, governance and international security. Cyber scam operations and their enabling networks operate at scale across Southeast Asia and beyond. They have reportedly trapped hundreds of thousands of people inside compounds where they are forced to conduct scams. Some operations retain workers through debt bondage, psychological coercion and financial incentives. Significant diversity in operational models – from high-security compounds to thousands of smaller operations located in apartments and other small premises – creates varied patterns of financial flows across jurisdictions. The money laundering process is part of a sophisticated financial service ecosystem. Most concerning is how networks of actors operate at scale and at the intersection of legitimate and illegitimate economies by using licensed crypto exchanges, registered fintech platforms and traditional banking services. Some are ‘crime as a service’ providers, explicitly providing money laundering services to cyber scam operations and doing so with corporate efficiency. This means that moving and laundering money has evolved into a marketplace-type structure where actors remain anonymous to others within the network. Governments, the private sector and civil society actors have sought innovative responses to disrupt the illicit industry. These include initiatives that ‘follow the money’ and disrupt the money laundering networks used by cyber scam operations. While some work has begun to explore illicit financial flows stemming from scam operations, notably related to cryptocurrencies, important gaps persist. Less is known about the wider set of financial flows, the mechanisms used to transfer proceeds in and out of the region and the networks involved. This policy brief seeks to help fill this gap by mapping wider related payments and providing insights into how money is moved and where it ultimately ends up. It concludes by providing actionable policy recommendations for Southeast Asian governments as well as regional and global financial service providers. Crucially, these recommendations identify entry points for disrupting the operations of the transnational organized crime groups that run cyber scam operations. The key findings include: Actors involved in cyber scams and trafficking for forced criminality often use cryptocurrency to move illicit money. They also use cash, fintech – such as peer-to-peer (P2P) payment apps – gaming or gambling platforms, bank transfers, shell and front companies, credit cards and pre-paid cards. The role of the formal banking sector in these financial flows appears significant, as many scam-related transfers are initiated by the victim from their own bank accounts before being converted into cryptocurrencies at different steps of the laundering process. While most financial institutions likely process these transactions unwittingly, evidence suggests they may be enabled by regulatory loopholes such as weak know-your-customer (KYC) requirements and/or excessively high minimum thresholds for reporting suspicious transactions. After being laundered and converted back into fiat currency4 from cryptocurrency, illicit funds are also likely to be moved again through the formal financial system.
Many of the fintech and cryptocurrency platforms that money laundering networks use to convert cryptocurrencies back into fiat are registered companies and hold financial service licences. Some owners of these platforms have close connections to the political and business elites in the countries of registration, suggesting influence over financial regulation and an interest in maintaining a policy environment amenable to the large-scale laundering of criminal proceeds. Transnational organized crime groups in Southeast Asia generate highly lucrative profits. This creates a vicious cycle: greater profits enable these groups to expand their influence, including over public officials and the financial sector, which in turn reduces scrutiny of cyber scam compounds and related suspicious financial transactions. With their growing wealth, these criminal networks invest further into other types of crime and crime-as-a-service infrastructure, generating additional profits that allow them to strengthen their influence and market position
Geneva: Global Initiative Against Transnational Organized Crime. 2025. 44p.
