The banking arm of a Cambodia-based conglomerate accused of running the world’s “largest ever illicit online marketplace” has had its banking license revoked by the country’s central bank, reported Radio Free Asia last week.
Huione Guarantee, the Telegram marketplace of Huione Group, has allegedly processed up to €22 billion ($24 billion) in illicit transactions since 2021, making it by far the world’s largest illegal online marketplace, cryptocurrency compliance firm Elliptic reported last year.
Huione Pay, the group’s banking arm, had its license withdrawn because of noncompliance with “existing regulations and recommendations that may have been made by the regulators,” a National Bank of Cambodia spokesperson told Radio Free Asia, a US Congress-funded media outlet.
Hub for cyberscam operations
The group is accused of being a key conduit for , which could be worth €11 billion a year, equivalent to around a quarter of the nation’s total economic output, according to the United States Institute of Peace (USIP), a think tank.
is facing intense pressure from China, its close ally, and from Western governments to .
One of Huione Pay’s three directors is Hun To, a cousin of Cambodian Prime Minister Hun Manet.
Hun To has been accused of illegal activity for decades, although his litigiousness has prevented some media outlets from reporting on his activities.
Huione Group denies the allegations of illegality and said in an online statement that Huione Pay had voluntarily given up its banking license last year and is applying for new licenses in Japan and possibly Canada.
A source who requested anonymity for security reasons said that this is a typical “we are really doing something” gesture from Phnom Penh, a reference to the Cambodian government’s alleged habit of appeasing foreign governments by making grand gestures that end up being less than promised.
Incidentally, the apparent move against Huione Pay came after Cambodia’s government said that it was happy to restart joint military drills with the United States, which, if it were to happen, would be a major step towards repairing bilateral relations that have deteriorated since 2017.
The source, who has knowledge of government affairs, reckons that the authorities’ alleged crackdown on Huione Group will look “rather toothless after the dust has cleared. And then the government will delay until it figures out an alternative.”
Economy too reliant on scams?
Southeast Asia’s vast “pig butchering” cyberscam industry — a reference to fraudsters taking their time to “fatten up” victims through romance cons and investment swindles — exploded during the COVID-19 pandemic when many of the region’s illegal casino operators turned to online fraud.
According to USAID’s latest Counter-Trafficking in Persons report, there could be as many as 150,000 people, including many foreigners, who have been forcibly coerced into working in Cambodia’s numerous scam compounds.
A raid on one last month freed 109 Thais, 50 Pakistanis, 48 Indians, five Taiwanese, and three Indonesians, according to Reuters.
Cambodia was ranked as the 22nd most corrupt country in the world by Transparency International’s latest Corruption Perceptions Index.
The sheer size of the industry has pushed Cambodia “beyond a tipping point insofar as the scam economy has already displaced the formal legitimate economy, making it almost impossible for political elites to address the challenges,” Jason Tower, USIP’s country director for Myanmar, told DW.
It is also “a threat to global security,” Tower added.
A global threat
Most of the cyberscam , so too are their victims.
This is a major concern for Beijing as and many citizens watch their life savings being wiped out by a dwindling property market.
In January, news that the Chinese actor Wang Xing had been rescued from provoked a major public backlash.
Beijing is forming closer with some Southeast Asian states, especially with Thailand, which has launched joint shock-and-awe raids on compounds in towns that border Myanmar and Cambodia since the turn of the year.
Bangkok is even threatening to build a border wall with Cambodia to stymie the flow of trafficked people.
But experts say Beijing is displeased at the lack of movement by its “ironclad friend” Cambodia, one of China’s main allies in Southeast Asia.
“China is increasingly pushing Cambodia to crack down, but Cambodia generally opts to align closer to China politically rather than sacrifice the scam industry,” said Tower.
Cambodia-based scammers are also increasingly targeting Westerners.
Last September, the US Embassy in Phnom Penh estimated that Americans had lost at least €90 million to scams originating in Cambodia. Some suspect the actual figure is much higher.
Last year, Washington imposed sanctions on Ly Yong Phat, a Cambodian senator and business tycoon close to Cambodia’s ruling Hun family, for his associations with the cyberscam industry.
There hasn’t yet been a reliable estimate of how much money Europeans have lost to Southeast Asian-based scammers.
Always stalling
Phnom Penh has spent years denying that it has a problem.
Instead, the authoritarian state, which has shut down almost all political opposition and independent reporting since 2017, has spent more time trying to prevent information leaking out about the illicit industry.
Mech Dara, a well-known Cambodian reporter, was arrested last October on allegedly trumped-up charges. He later agreed to quit journalism.
The recent move against Huione Group is “superficial at best,” Jacob Sims, a co-founder of Shamrock, a public-private coalition combatting transnational cybercrime, told DW.
“If they really wanted to hold Huione accountable for its untold contribution to human misery and criminal malfeasance, they would have arrested all its known executives, starting with the prime minister’s cousin,” he added.
“Clearly, that was not the goal. Viewing this as anything more than sovereign criminal obfuscation is a ridiculous exercise in suspended disbelief.”
Edited by: Srinivas Mazumdaru
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