The U.S. Department of the Treasury’s Office of Foreign Assets Control has sanctioned Cambodian businessman Ly Yong Phat for his role in operating cyber-scam centers that exploited trafficked workers to run crypto scams.
In a Sept. 12 press release, Phat, who is also a Cambodian senator, along with his conglomerate L.Y.P. Group and associated entities, was involved in serious human rights abuses related to forcing trafficked workers to participate in online scam operations.
These scams usually centered around convincing targets to invest in false cryptocurrency schemes or bogus foreign exchange trades, often leading to significant losses.
Crypto scams surge in Asia
The OFAC cited reports from the Financial Crimes Enforcement Network and the FBI’s Internet Crime Complaint Center which documented a dramatic increase in losses from investment fraud that often leverages the hype around cryptocurrencies.
In 2023 alone, cryptocurrency investment fraud losses surged to $3.96 billion, with the schemes being predominantly orchestrated by criminal organizations based in Southeast Asia, including those linked to the O-Smach Resort and other entities controlled by Phat.
The regulator alleges that many of those orchestrating these scams were, in fact, victims of human trafficking themselves. Deceived by false promises of employment, individuals were lured to the O-Smach Resort and other sites in Cambodia tied to Phat. Upon arrival, their phones and passports were confiscated, stripping them of any chance to escape, and they were forced into running crypto-related scams.
These trafficked individuals endured severe physical and psychological abuse, including beatings, electric shocks, and threats of being sold into further exploitative situations, effectively turning them into both victims and perpetrators.
According to the press release, local authorities have managed to rescue victims of various nationalities like China, India, Indonesia, Malaysia, Singapore, Thailand, and Vietnam.
Phat and his associated entities have been cut off from the U.S. financial system, with their assets frozen and all transactions by U.S. residents with them prohibited. These sanctions also apply to any businesses owned 50% or more by Phat or his affiliates, carrying harsh penalties for anyone found violating these rules.
From Cambodia to Laos
The incident, however, is not an isolated one. As reported by crypto.news, a 2023 investigation by Bloomberg journalist Zeke Faux uncovered a similar network in Cambodia and Myanmar, operated by Chinese gangsters.
Likewise, the Indian Embassy in Laos recently rescued 14 Indian youths from similar cyber-scam operations in the Golden Triangle Special Economic Zone where they were trafficked and coerced into crypto-related scams.
A 2023 FBI report warned that criminals use fake job ads on social media — ranging from tech support and call center roles to beauty salon positions — to lure victims into these operations.
Tổng hợp và chỉnh sửa: ThS Phạm Mạnh Cường
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