Crypto Scam Involvement? US Sanctions Cambodian Tycoon

The US Department of the Treasury sanctioned a Cambodian mogul and his businesses for their role in crypto-related human trafficking operations. The magnate’s companies have been investigated for their serious human rights abuse related to trafficking crimes and online scams for the past two years.

US Sanctions Cambodian Senator

On Thursday, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Cambodian businessman and Senator Ly Yong Phat, alongside his conglomerates L.Y.P Group and O-Smash resort, for their alleged involvement in human trafficking and crypto scams.

According to the press release, the O-Smach Resort, owned by the Cambodian Senator, has been investigated by the police for an “extensive and systemic serious human rights abuse.” The investigation revealed that victims were reportedly lured to the resort with false employment opportunities.

Upon arrival, the victims would have their phones and passports confiscated and were forced to work on scam operations, including crypto-related fraud. The trafficked people are forced to take part in ‘pig butchering’ schemes, having to develop relationships with their victims to deceive them into investing in cryptocurrencies or over-the-counter (OTC) foreign exchanges.

Per the investigation, the trafficking victims who tried to ask for help were tortured with diverse methods, including beating and electric shocks. As a result, local authorities have conducted several rescue missions at Ly’s resort between October 2022 and March 2024, freeing victims from China, India, Indonesia, Malaysia, Singapore, and other countries.

In April, BBC reported that over 250 Indians were rescued by authorities. The report revealed that the victims were held in Cambodia against their will after arriving in the country under false promises. The victims were among thousands of others in Phnom Pehn allegedly forced to target people from their home country with crypto schemes and “love scams.”

Cambodia’s Crypto Fraud And Human Trafficking Problem

Earlier this year, the US Department of State’s Office to Monitor and Combat Trafficking in Persons published its Trafficking in Persons (TIP) Report. The report highlighted the human rights abuses in Cambodia, including the towns of O Smach and Koh Kong.

As a result, the OFAC also designated three Cambodia-based hotels – Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel– for being controlled by Senator Ly. The TIP report also noted the ongoing widespread corruption and official complicity in trafficking crimes, which resulted in selective and often politically motivated law enforcement.

As reported by Bitcoinist, Tether froze $28 million in USDT in July, linked to illicit activities in Cambodia. The tokens were connected to the Huione Group, accused of crypto-related theft and money laundering.

The investigation claims that the Cambodian conglomerate has ties to the country’s ruling Hun family. Additionally, it accused the company of making nearly $11 billion with its involvement in ‘pig butchering’ scams and other illegal activities, including human trafficking.

The FBI’s Internet Crime Complaint Center (IC3) has warned that these scams are largely perpetrated by criminal organizations based in Southeast Asia, noting a spike in cryptocurrency investment schemes.

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