The U.S. 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. Treasury Department’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, the O-Smach resort, owned by the Cambodian senator, was investigated by police for “serious and widespread human rights violations.” The investigation revealed that the victims were allegedly lured to the resort by false job offers.
Upon arrival, victims had their phones and passports confiscated and were forced to participate in fraudulent transactions, including those involving cryptocurrencies. Trafficking victims were forced to take part in “pig butchering” operations, and were required to develop relationships with their victims to deceive them into investing in cryptocurrencies or over-the-counter (OTC) foreign exchange transactions.
According to the investigation, trafficking victims who tried to seek help were tortured with various methods, including beatings and electric shocks. As a result, local authorities conducted several rescue missions in the Ly resort between October 2022 and March 2024, releasing victims from China, India, Indonesia, Malaysia, Singapore and other countries.
In April, the BBC reported that more than 250 Indians had been rescued by authorities. The report found that the victims had been held in Cambodia against their will after arriving in the country under false promises. The victims were among thousands of others in Phnom Penh who were allegedly forced to target people from their home countries with cryptocurrency schemes and “romance scams.”
The Problem of Crypto Fraud and Human Trafficking in Cambodia
Earlier this year, the U.S. Department of State’s Office to Monitor and Combat Trafficking in Persons released its Trafficking in Persons (TIP) Report. The report highlights human rights violations in Cambodia, particularly in the cities of O Smach and Koh Kong.
OFAC also designated three Cambodia-based hotels – the Garden City Hotel, the Koh Kong Resort, and the Phnom Penh Hotel – as being controlled by Senator Ly. The TIP report also highlighted widespread corruption and government complicity in trafficking crimes, which resulted in selective and often politically motivated enforcement.
As Bitcoinist reported, Tether froze $28 million in USDT in July, linked to illicit activities in Cambodia. The tokens were linked to the Huione Group, which has been accused of cryptocurrency-related theft and money laundering.
The investigation alleges that the Cambodian conglomerate has ties to the country’s ruling Hun family. It also accuses the company of making 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) warned that these scams were largely perpetrated by criminal organizations based in Southeast Asia, noting an increase in cryptocurrency investment schemes.
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