The US Department of the Treasury has taken significant action by sanctioning a prominent Cambodian businessman and his enterprises due to their involvement in human trafficking and crypto-related scam operations. This move underscores the severity of the human rights abuses linked to these activities.
US Sanctions Cambodian Senator
On Thursday, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Cambodian businessman and Senator Ly Yong Phat, along with his conglomerates L.Y.P Group and O-Smach Resort. These sanctions are a response to their alleged involvement in both human trafficking and cryptocurrency scams.
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According to a press release, the O-Smach Resort, owned by Senator Ly Yong Phat, has been under police investigation for “extensive and systemic serious human rights abuse.” The investigation revealed that victims were reportedly enticed to the resort with fraudulent job offers. Once they arrived, their phones and passports were confiscated, and they were coerced into participating in scam operations, including crypto-related fraud.
In-Depth Look at the Trafficking Operations
The victims were forced into a scheme known as ‘pig butchering,’ which involves developing relationships with their targets to deceive them into investing in cryptocurrencies or over-the-counter (OTC) foreign exchanges. Those who sought help reportedly faced severe torture, including beatings and electric shocks. Local authorities conducted several rescue missions at Ly’s resort between October 2022 and March 2024, liberating victims from various countries such as China, India, Indonesia, Malaysia, and Singapore.
In April, the BBC reported that over 250 Indians were rescued by authorities. The report disclosed that these victims were held in Cambodia against their will after being lured into the country under false promises. They were part of a larger group allegedly forced to target individuals from their home country with crypto scams and “love scams.”
Cambodia’s Crypto Fraud And Human Trafficking Problem
Earlier this year, the US Department of State’s Office to Monitor and Combat Trafficking in Persons released its Trafficking in Persons (TIP) Report, highlighting the human rights abuses in Cambodia, specifically in the towns of O Smach and Koh Kong. As a result, the OFAC also designated three Cambodia-based hotels—Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel—as being controlled by Senator Ly. The TIP report further noted ongoing widespread corruption and official complicity in trafficking crimes, leading to selective and often politically motivated law enforcement actions.
In recent developments, Tether froze $28 million in USDT in July, which was linked to illicit activities in Cambodia. The tokens were connected to the Huione Group, accused of crypto-related theft and money laundering. The investigation suggested that the Cambodian conglomerate has ties to the country’s ruling Hun family and accused the company of generating nearly $11 billion through ‘pig butchering’ scams and other illegal activities, including human trafficking.
Global Implications and FBI Warnings
The FBI’s Internet Crime Complaint Center (IC3) has issued warnings that these scams are largely orchestrated by criminal organizations based in Southeast Asia. There has been a noticeable spike in cryptocurrency investment schemes, further emphasizing the need for international cooperation to combat these crimes.
Bitcoin (BTC) is currently trading at $58,204 in the three-day chart.
