US Imposes Sanctions on Cambodian Senator Tied to CryptoRelated Human Trafficking Schemes
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on Cambodian entrepreneur Ly Yong Phat due to his involvement in cyber-scam operations that exploited trafficked individuals to execute cryptocurrency frauds.
In a press release dated September 12, the OFAC revealed that Phat, who also serves as a senator in Cambodia, along with his company, L.Y.P. Group, and affiliated organizations, was implicated in severe human rights violations by coercing trafficked workers into participating in online scams.
These fraudulent schemes primarily aimed to persuade victims to invest in fictitious cryptocurrency ventures or sham foreign exchange trades, often resulting in substantial financial losses.
### A Rise in Crypto Scams Across Asia
The OFAC referenced findings from the Financial Crimes Enforcement Network and the FBI’s Internet Crime Complaint Center, which highlighted a significant spike in losses from investment fraud, particularly exploiting the growing interest in cryptocurrencies. In 2023, losses from cryptocurrency investment fraud soared to $3.96 billion, with many of these schemes reportedly orchestrated by criminal syndicates in Southeast Asia, including those associated with the O-Smach Resort and other entities under Phat’s control.
The regulator has reported that many individuals involved in these fraudulent activities were, in fact, victims of human trafficking themselves. Lured by false job offers, these individuals were transported to locations like the O-Smach Resort, only to have their phones and passports seized upon arrival, leaving them with no means of escape and forcing them into cryptocurrency scams.
### A Harrowing Reality for Victims
Victims endured horrific physical and psychological abuse, including beatings, electric shocks, and threats of being sold into even more exploitative circumstances, effectively rendering them both victims and unwitting perpetrators.
The press release noted that local authorities have successfully rescued individuals from various nationalities, including those from China, India, Indonesia, Malaysia, Singapore, Thailand, and Vietnam.
As a result of these sanctions, Phat and his affiliated businesses have been barred from accessing the U.S. financial system, with their assets frozen and any transactions involving U.S. residents prohibited. The sanctions extend to any business that is 50% or more owned by Phat or his associates, imposing severe penalties on anyone who violates these regulations.
### Broader Implications
However, this incident is not an isolated case. As reported by crypto.news, a 2023 investigation conducted by Bloomberg journalist Zeke Faux uncovered a similar network operating in Cambodia and Myanmar, run by Chinese criminal organizations.
Additionally, the Indian Embassy in Laos recently intervened to rescue 14 Indian youths who had fallen victim to analogous cyber-scam operations in the Golden Triangle Special Economic Zone, where they were trafficked and coerced into participating in cryptocurrency scams.
A 2023 FBI report cautioned that criminals are utilizing fraudulent job advertisements on social media—ranging from tech support and call center positions to roles in beauty salons—to lure unsuspecting victims into these nefarious operations.
### Further Reading
– Crypto scam: India rescues 14 human-trafficking victims lured by crypto scammers.
