US Penalized 19 Entities For Crypto Scam Tie To Human Trafficking

$10B Lost in Crypto Scam: US Sanction 19 Entities in Myanmar, Cambodia

It is both disturbing and shocking to learn that thousands of vulnerable people have been trafficked, enslaved, and coerced into running a large-scale online crypto scam. What has happened and how the US Treasury reacted to this crypto scam is explained in this article. 

What Happened?

On September 8, the U.S. Treasury Department announced sweeping sanctions on 19 entities across Myanmar and Cambodia, accusing them of running online fraud schemes powered by forced labor. According to officials, nine of the sanctioned groups in Myanmar operated under the protection of the Karen National Army (KNA), a militia already facing sanctions.

Investigations revealed that these networks trafficked people—often under the pretext of legitimate job opportunities—and then trapped them in scam compounds. At that point, victims were forced to commit fraud in cryptocurrency investments. They were instructed to message strangers using messaging apps, social media, or unsolicited texts, pretending to be a legitimate financial advisor or online acquaintances to gain their trust, then defraud them.

The Treasury termed the practice as a kind of modern slavery, and the victims were subjected to debt bondage, threats, violence, and even sexual exploitation in case they defied or did not achieve scam quotas. The operations have turned out to be one of the biggest fraud systems in Southeast Asia that has a direct impact on US citizens.

Source: Wu Blockchain X

What is Done by the US Treasury?

To fight this, the U.S. Treasury Department has placed sanctions on all 19 identified entities, effectively cutting them off from the financial system and freezing any assets under U.S. jurisdiction. By doing this, Washington hopes to disrupt the financial networks that support these fraud rings and send a clear message to others engaging in similar practices.

Anthony Hurley, the U.S. Treasury’s Under Secretary for Terrorism and Financial Intelligence, emphasized that combating organized financial crime is now a priority. He stated:

“Cyber fraud in Southeast Asia not only threatens the financial security of Americans but also forces tens of thousands of people into modern slavery. The U.S. Treasury will use all its tools to protect victims and hold perpetrators accountable.”

This move builds on broader international efforts to disrupt scam syndicates operating out of Myanmar, Cambodia, Laos, and other regions, where weak governance and corruption have allowed such fraudulent activities to flourish.

What US Citizens Faced?

For Americans, the consequences have been devastating. In 2024 alone, the Treasury estimated that more than $10 billion was lost by US citizens in fraud operations originating in Southeast Asia. 

Victims were often lured into these scams with what is popularly known as "pig-butchering scams, "a tactic in which scammers develop online relationships with unsuspecting people before tricking them into made-up crypto or investment opportunities.

Many Americans drained savings accounts, maxed out credit cards, or took out loans, thinking that they were making lucrative investments. Rather, they had their money laundered into networks operated by criminal networks in foreign countries. 

The size of such losses not only testifies to the complexity of the scams but also to the overwhelming psychological cost of such scams to victims who, in many cases, feel shame, financial devastation, and emotional trauma.

Conclusion

The sanctions are a significant move towards addressing the nexus between human trafficking and financial crime. For now, the challenge remains global cooperation to protect both the victims forced into Crypto scam labor and the unsuspecting people abroad who are targeted daily.