- The Chinese use Tether to gamble and cash out proceeds from regional cyber scams
- The stablecoin comes with no restrictions on transferring, laundering money
- Cambodia's cyber scam industry is worth billions of dollars
The Cambodian capital of Phnom Penh has many around-the-clock currency exchanges offering to exchange yuan for Tether (USDT), the stablecoin of choice for moving illegal funds in and out of the Southeast Asian country. The Chinese also use Tether to gamble and cash out proceeds from regional cyber scams, the South China Morning Post wrote.
Money laundering at lightning speed
Cambodia banned cryptocurrencies and stablecoins for trading in 2017, but they are a core component of the country’s shadow economy according to experts. The trading fees are low and there are no restrictions on transferring, laundering, and hiding money. These happen at the speed of light.
Cryptocurrency is very popular in Cambodia’s myriad casinos, catering to Chinese customers evading gambling bans at home. Most online gambling sites operating from Cambodia accept cryptocurrency as well.
Cambodia also “boasts” a cyber scam industry worth billions of dollars, which spreads out from casinos in Phnom Penh and areas bordering neighboring Laos, Vietnam, and Thailand.
Efforts of law enforcement
In November this year, the US Department of Justice confiscated assets worth almost $9 million, which were traced to dozens of victims of online scams. This occurred following an investigation of crypto exchange OKX and accounts with Tether Holdings, the company behind USDT. Tether announced it had frozen another $225 million in connection with pig butchering scams in the region.
Cambodia, Laos, and a few other Southeast Asian countries have become the epicenter of money laundering from cybercrime and online gaming. While the extent of Tether’s reach into Cambodia’s economy is not known, its appeal to Southeast Asia’s crime groups is indisputable according to security experts. Jeremy Douglas, Southeast Asia’s representative of the UN Office on Drugs and Crime, was quoted by the South China Morning Post as saying:
In a sense, the perfect operating conditions for criminals have been created in border areas and special economic zones of the region. The capacity of criminal groups running online gaming, scams, money-laundering operations and underground banks is far more advanced than most enforcement agencies in Southeast Asia.
