In April, China's President, Xi Jinping, undertook a tour of the Association of Southeast Asian Nations (Asean) member countries in an effort to shore up his country's relationships amidst rising tensions and fears of a full-blown trade war with the United States. While these visits sought to tighten diplomatic ties and deepen economic collaborations, a troubling issue continues to fester in many countries: the growing proliferation of cybercrime and multi-billion-dollar cyber scam networks.
As some ill-got investment has been linked to China. Many of these scam centres -- operated by or with the support of the Chinese investors -- have taken root within Asean countries in recent years. Thriving on corruption and a lack of transparency, these operations have seized on the willingness of certain countries, such as Cambodia and Myanmar. Now, at what the United Nations Office on Drugs and Crime (UNODC) calls an "inflexion point" for cybercrime regionally, nations around the world are stepping up their responses to the risk of online fraud by scam centres in South East Asia.
These centres, which were once directed at domestic victims, have gone global with the help of artificial intelligence (AI). This has enabled the development of alternative online worlds, into which victims are drawn and subsequently defrauded. Operators also now have years of accumulated knowledge at their disposal, and can use this database of information to identify weak spots in their potential victims.
For example, people who are worried about online banking are being targeted by callers purporting to represent law enforcement agencies, requesting they share their card details for investigation. Similarly, people who want to start a relationship online find themselves talking to people who seem to match their criteria perfectly. These disarming, and increasingly sophisticated, tactics can have crippling impacts for citizens, not just in Asia but across the globe.
US-based Heartland Tri State Bank is a case in point. It collapsed in 2024 after its CEO, Shan Hanes, was found guilty of embezzlement and imprisoned for making $47 million (1.5 billion baht) in wire transfers to cyber scammers. The scammers had convinced him to invest in a bogus cryptocurrency scheme, and Hanes would watch his "investment" increase in value on a fake website.
The bank's failure cost the Federal Deposit Insurance Corporation $54.2 million to reimburse savers. Local Kansas shareholders in the bank, including farmers and teachers, saw their investment wiped out. While marketplaces, often via Telegram, are providing a platform to all to extract and launder criminal proceeds around the world. Some countries in Asean, including the Philippines, Laos and Myanmar, have taken steps, in response to international pressure, to crack down on cybercrime operations within their environs.
However, in the case of Cambodia, there has been willful ignorance of an industry that is harming ordinary Khmer citizens and those in the wider region. UNODC recently pointed out that there has been no sustained law enforcement drive by the political regime in Phnom Penh since a series of raids focused on Sihanoukville in 2022.
There is growing evidence that the laxness of the current administration is acting as a pull factor for this criminality. In February this year, shortly before Filipino police rescued over 30 Indonesian nationals from a Chinese-run online operation in Pasay in the Philippines, its operators were exploring a move to Cambodia.
The role of certain Asean countries in propagating cybercrime runs deep in some cases. O-Smach Resort Case, near the Thai border in Cambodia, has been repeatedly identified as a major hub for cyber scam operations and human trafficking. Victims at this centre have described horrific working and living conditions, including long hours, physical abuse, and threats of violence if they fail to meet scamming targets, which include "pig butchering" investment fraud, and romance-related scams.
In September 2024, the US Treasury Department sanctioned Cambodian tycoon and cabinet-level advisor, Ly Yong Phat, and his LYP Group Co, which owns O-Smach Resort, specifically citing "serious human rights abuse related to the treatment of trafficked workers subjected to forced labour".
A subsequent US Trafficking in Persons (TIP) Report also officially noted that the Cambodian government has failed to adequately investigate and hold accountable officials involved in trafficking crimes, including those linked to cyber scam operations. This is a problem that is not exclusive to Cambodia, but also to other Asean members.
This shows that there is still more to do, particularly among Asean nations, to clamp down on these complex and increasingly cross-border operations.
Members should push for an independent investigation into the casinos used for cybercrime operations. The findings of this investigation, processed through reformed courts, must lead to the removal of the mafia, the sanctioning of those involved, and a fundamental opening of the country. Without this, the security and economy of the region will continue to be threatened.
The UNODC has been clear that corruption and lack of effective governance are driving factors in the growth of cybercrime. If governments in Southeast Asia are serious about protecting their citizens, they must take action.
Samady Ou is a Cambodian youth activist, Human Rights Foundation Freedom Fellow, and Youth Ambassador for the Khmer Movement for Democracy.
