The US Department of the Treasury has imposed sanctions on a Cambodian tycoon and his enterprises due to their connection to crypto-related human trafficking activities. The magnate’s firms have been under investigation for significant human rights violations linked to trafficking offenses and fraudulent online schemes over the past two years.
US Imposes Sanctions on 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, along with his companies L.Y.P Group and O-Smash resort, over allegations of involvement in human trafficking and cryptocurrency scams.
The press release notes that the O-Smach Resort, owned by the Cambodian Senator, has faced police scrutiny for engaging in “extensive and systematic serious human rights abuses.” Investigations indicated that victims were allegedly attracted to the resort under false employment pretenses.
Once they arrived, the victims reportedly had their phones and passports seized and were coerced into working on scam operations, which included crypto fraud. The trafficked individuals were compelled to participate in ‘pig butchering’ schemes, wherein they developed relationships with unsuspecting victims to trick them into investing in cryptocurrencies or participating in over-the-counter (OTC) foreign exchanges.
The investigation found that trafficking victims pleading for assistance endured various forms of torture, including beatings and electric shocks. Consequently, local authorities have executed several rescue missions at Ly’s resort from October 2022 to March 2024, liberating individuals from China, India, Indonesia, Malaysia, Singapore, and other nations.
In April, BBC reported that over 250 Indians had been rescued by authorities. The report highlighted that these victims were held captive in Cambodia after arriving under false agreements. They were among thousands in Phnom Pehn allegedly coerced into targeting individuals from their home country with cryptocurrency schemes and “love scams.”
The Extent of Crypto Fraud And Human Trafficking in Cambodia
Earlier this year, the US Department of State’s Office to Monitor and Combat Trafficking in Persons released its Trafficking in Persons (TIP) Report. This report underscored the human rights violations occurring in Cambodia, particularly in the regions of O Smach and Koh Kong.
As a result, the OFAC also designated three hotels in Cambodia—Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel—as being controlled by Senator Ly. The TIP report also emphasized the prevalent corruption and complicity of officials in trafficking activities, leading to selective and often politically charged law enforcement efforts.
According to a report by Bitcoinist, Tether froze $28 million in USDT in July, associated with illicit operations in Cambodia. These tokens were linked to the Huione Group, which is accused of crypto-related theft and money laundering.
The investigation has revealed that the Cambodian conglomerate is connected to the ruling Hun family. Furthermore, it claims that the company generated nearly $11 billion through its involvement in ‘pig butchering’ scams and other illegal endeavors, including human trafficking.
The FBI’s Internet Crime Complaint Center (IC3) has issued warnings that these scams are predominantly executed by criminal organizations operating from Southeast Asia, observing an increase in cryptocurrency investment schemes.
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