Bitrabo Editorial
The United States Treasury has imposed sanctions on a prominent Cambodian businessman, identifying his companies for their role in human trafficking linked to cryptocurrency scams. This individual and his enterprises have faced scrutiny for human rights violations associated with trafficking and fraudulent online activities over the past two years.
US Imposes Sanctions on Cambodian Senator
On Thursday, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Ly Yong Phat, a Cambodian senator and businessman, along with his companies, L.Y.P Group and O-Smash Resort, for suspected connections to human trafficking and crypto-related deceit.
The O-Smach Resort, owned by Senator Ly, has been under police investigation due to allegations of severe human rights violations. Reports indicate that victims were tricked into coming to the resort under the guise of job offers.
Once they arrived, victims had their phones and passports taken and were coerced into working for scam operations, including cryptocurrency fraud. They were made to participate in ‘pig butchering’ schemes which required them to engage with potential victims to manipulate them into investing in cryptocurrency or other foreign exchanges.
Reports from the investigation detail that victims who attempted to seek help endured torture, including beatings and electric shocks. Consequently, local authorities have managed several rescue operations at Ly’s resort between October 2022 and March 2024, liberating individuals from various countries such as China, India, and Malaysia.
In April, a BBC report stated that more than 250 individuals from India were rescued. The report unveiled that these victims were forcibly held in Cambodia after being deceived into believing that they would find work. Many of them, alongside thousands of others in Phnom Penh, were allegedly compelled to target compatriots with fraudulent crypto schemes and romantic scams.
Issues of Crypto Fraud and Human Trafficking in Cambodia
Earlier this year, the U.S. Department of State released its Trafficking in Persons (TIP) Report, which addressed the human rights violations occurring in Cambodia, particularly in O Smach and Koh Kong.
The OFAC has also targeted three hotels in Cambodia, namely Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel, for their connections to Senator Ly. This TIP report further indicated a severe problem of corruption and complicity among officials in trafficking, leading to inconsistent and often politically biased enforcement of laws.
As noted by Bitrabo, Tether took action in July to freeze $28 million in USDT associated with illegal activities in Cambodia. These funds were linked to the Huione Group, which faced allegations of theft and money laundering in the crypto sphere.
Investigations also suggest that this Cambodian conglomerate has connections to the politically influential Hun family, earning an estimated $11 billion from its ventures in ‘pig butchering’ scams and other criminal activities, including human trafficking.
The FBI’s Internet Crime Complaint Center (IC3) has issued warnings alerting the public to the rising prevalence of these scams, predominantly facilitated by criminal networks in Southeast Asia, showcasing a surge in cryptocurrency investment frauds.