The US Treasury Department has sanctioned a Cambodian tycoon and his companies for their role in cryptocurrency-related human trafficking operations. The tycoon’s companies have been under investigation for serious human rights violations related to trafficking crimes and online scams over the past two years.
US sanctions Cambodian senator
On Thursday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)… sanctioned Cambodian businessman and senator Ly Yong Phat, along with his conglomerates LYP Group and O-Smash Resort, for their alleged involvement in human trafficking and cryptocurrency scams.
According to the press release, police have investigated the O-Smach resort, owned by the Cambodian senator, for “serious widespread and systematic abuse of human rights.” The investigation revealed that the victims were apparently lured to the resort with false employment opportunities.
Upon arrival, victims had their phones and passports confiscated and were forced to work on fraudulent operations, including cryptocurrency fraud. Trafficked People are forced to participate in “pig slaughter” schemes and have to develop relationships with their victims in order to trick them into investing in cryptocurrencies or over-the-counter (OTC) currency markets.
According to the investigation, trafficking victims who tried to call for help were tortured with various methods, including beatings and electric shocks. As a result, local authorities have carried out several rescue missions in the Ly resort between October 2022 and March 2024, freeing victims from China, India, Indonesia, Malaysia, Singapore and other countries.
In April, the BBC reported Authorities rescued more than 250 Indians. The report revealed that the victims were held in Cambodia against their will after arriving in the country with false promises. The victims were among thousands of others in Phnom Penh who were allegedly forced to target people in their home country with cryptocurrency schemes and “love scams.”
The problem of cryptocurrency fraud and human trafficking in Cambodia
Earlier this year, the U.S. State Department’s Office to Monitor and Combat Trafficking in Persons released its Trafficking in Persons (TIP) Report. The report highlighted human rights abuses in Cambodia, including in the towns of O Smach and Koh Kong.
As a result, OFAC also designated three Cambodia-based hotels (Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel) for being controlled by Senator Ly. report It also noted persistent widespread corruption and official complicity in trafficking crimes, leading to 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 linked to the Huione Group, which is accused of cryptocurrency theft and money laundering.
The investigation alleges that the Cambodian conglomerate has ties to the country’s ruling Hun family. It also accused the company of earning nearly $11 billion from its involvement in pig slaughtering 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 that spike in cryptocurrency investment schemes.
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