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Criminal networks running forced labor scam compounds across Southeast Asia laundered $260 million through cryptocurrency last year, an 85% annual surge as gangs abandon traditional banking entirely in favor of blockchain transfers that settle in minutes and bypass conventional monitoring systems, according to a new Chainalysis report.
Crypto money laundering activities surged 85% year-over-year, according to a report by Chainalysis, highlighting how gangs are abandoning traditional banking rails and embracing digital wallets to move profits across borders within seconds.
Authorities say the funds originate from forced labor compounds and scam centers scattered across Cambodia, Myanmar, and Laos — facilities notorious for trapping victims into conducting fraud.
Investigators link the crypto money laundering flows to romance scams, phishing campaigns, fake investments, and online gambling rings. Victims span more than 60 countries.
Tom McLouth, an intelligence analyst at Chainalysis, explained the shift:
“Digital assets allow criminals to transfer funds globally almost instantly while bypassing conventional remittance monitoring systems,” McLouth said. “These networks prioritize speed and scale — crypto gives them both.”
Workers inside the compounds are often lured with fake job offers before being held against their will and forced to run scams demanding payment in cryptocurrencies.
Criminal syndicates now rely on layered wallet structures — dozens or even hundreds of addresses — to obscure money trails.
This structure enables large-scale crypto money laundering without interacting with banks. Traditional cross-border transfers take days and trigger compliance checks, but blockchain payments settle in minutes.
Investigators say the gangs convert stolen funds through exchanges abroad before redistributing them to operators and traffickers.
“They are essentially running multinational financial networks outside the regulated system,” a regional financial crime investigator told reporters.
The shift has also fueled growth in illegal online casinos and digital betting platforms across Southeast Asia.
Despite criminals embracing crypto for anonymity, blockchain transparency is now helping authorities.
Every transfer leaves a permanent record — a major difference from cash-based laundering schemes.
Law enforcement agencies increasingly rely on blockchain analytics to map crypto money laundering patterns and identify wallet clusters.
Investigators combine financial intelligence with cyber-tracking tools, allowing faster disruption of operations compared to past decades.
The international policing body Interpol recently classified scam compounds in the region as a transnational organized crime threat after a global investigation.
The designation came during a General Assembly meeting in Marrakech, where officials warned that crypto-enabled fraud operations have scaled into an industrialized criminal economy.
Authorities say cooperation between exchanges, regulators, and analytics firms is starting to slow the growth of crypto money laundering, but the criminals continue to adapt.
Experts now warn the trend marks a permanent shift rather than a temporary tactic.
Digital assets are no longer just used for ransom payments — they now finance entire criminal infrastructures, from recruitment to payments to profit extraction.
As long as scam compounds operate, crypto money laundering will remain central to their survival.
“Technology changed the business model of organized crime,” a cybercrime specialist said. “They’ve essentially digitized exploitation.”
For investigators, the battle has become technological rather than geographical — tracking code instead of borders.
