- Southeast Asia has become the world’s global hotbed of cyberfraud activities, centered on cryptocurrency, a report by the UN has revealed.
- Criminal gangs are evading official crackdowns by relocating to hard-to-reach areas and using satellite internet and illegal crypto exchanges like Haowang.
- The Haowang platform, linked to Cambodia, has processed over $24 billion in crypto inflows since 2021, expanding into gambling, trading apps, and its own stablecoin.
Cybercriminal organizations in Southeast Asia are significantly improving their operations, and they’re using cryptocurrency as a fundamental part of their fraudulent activities. According to a recent UN report, these criminal networks continue to spread across the world despite the crackdown from authorities.
They have operational bases in various places, including Myanmar and Mexico. The study revealed that Southeast Asia is now the central location for the leading and highly profitable cybercrime activities worldwide, and cryptocurrency is a fundamental aspect of their operations.
The report also revealed that the cyberfraud sector within this region has grown more rapidly than any other form of transnational crime. This happens because the operators can easily scale their operations and target millions of users across national boundaries through the internet.
According to the UN study, cyber fraud resulted in the loss of up to $37 billion among residents in Southeast and East Asia in 2023 alone, with a large percentage of those losses associated with crypto scams.
Criminal Networks Evade Authorities with Illegal Cryptocurrency Exchanges
The near-anonymity and global accessibility of cryptocurrencies have made it almost impossible for authorities to find a lasting solution to the problem. As authorities are stepping up their efforts to dismantle known scam centers, some of these criminal networks are responding by moving their bases of operations to more geographically isolated areas.
Others are moving their activities online with the help of technologies such as Starlink satellite internet to remain undetected by the government. The UN report also showed that these criminal networks are using illegal cryptocurrency exchanges for their scam operations.
One of such notable exchanges is the Huione Guarantee (now known as Haowang).
Crypto inflows across illegal marketplaces. Source: the UN.
According to the report, the Haowang platform has links with several nations, most notably, Cambodia, and has processed cryptocurrency transactions worth billions of dollars over the past four years. Following its massive growth, the platform has moved from just being a marketplace to exchange cryptocurrencies.
It has now launched several crypto products such as trading applications, an online gambling platform, and a US dollar-pegged stablecoin to avoid control from the authorities. The study further reported that cryptocurrency sellers on this illegal platform have received funds worth a minimum of $24 billion since 2021. Also, the platform boasts of nearly one million users.