Treasury sanctions Cambodian scam centers

The Treasury Department sanctioned Cambodian businessman Ly Yong Phat, L.Y.P. Group Co., and O‑Smach Resort for their role in human rights abuse related to the treatment of trafficked workers subjected to forced labor in online scam centers.

Background: According to the Financial Crimes Enforcement Network, confidence scammers leverage fictitious identities and elaborate narratives to develop trusted relationships and deceive the victim, often convincing victims to invest in virtual currency with the intent of defrauding them of their funds. These scams are largely perpetrated by criminal organizations based in Southeast Asia that are fueling a spike in cryptocurrency investment schemes.

More: The frontline scammers in virtual currency confidence schemes—also known as “pig butchering”—are themselves often victims of trafficking, including forced labor.

Scale: The FBI this week reported that it received 69,000 public complaints regarding crypto fraud last year. Losses totaled $5.6 billion, an increase of 45% from 2022, with almost all losses attributed to crypto confidence schemes.

ICBA Resources: Recent ICBA blog posts spotlight the growth of these scams and the need for a policy response.