Cybercrime , Fraud Management & Cybercrime , Geo Focus: Asia

UN Says Asian Cybercrime Cartels Are Rising Global Threat

Cybercrime syndicates across Southeast Asia have teamed up with human traffickers, money launderers and cryptocurrency services to build an increasingly effective cybercrime ecosystem that can survive law enforcement crackdowns, according to a new United Nations report.

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The U.N. Office on Drugs and Crime said in a report published Monday that "highly sophisticated" Asian crime syndicates have expanded their operations in recent years, adopted new technologies and amassed billions of dollars in cryptocurrency. The agency estimates that Asian victims of scams and hacking incidents lost $18 billion to $37 billion in 2023.

"Leveraging technological advances, criminal groups are producing larger-scale and harder-to-detect fraud, money laundering, underground banking and online scams," said Masood Karimipour, U.N. agency regional representative for Southeast Asia and the Pacific. "This has led to the creation of a criminal service economy, and the region has now emerged as a key testing ground for transnational criminal networks looking to expand their influence and diversify into new business lines."

Many criminal groups that started out in abandoned buildings now operate out of modern, heavily fortified compounds characterized by high walls, barbed wire, armed guards and tight surveillance. Within the walls, they operate an assortment of underregulated casinos, special economic zones, business parks and illegal online gambling platforms.

This modern infrastructure is a sign that the groups are making huge profits with little or no law enforcement intervention. In recent years, many of groups have shifted operations to heavily forested or inaccessible areas such as the Mekong valley or war-torn regions, such as KK Park in Myanmar's Kayin state.

U.N. researchers said several Asian criminal groups have set up bases in the Golden Triangle, a large, mountainous region covering parts of Myanmar, Thailand and Laos. The region has served as the world's largest hub of opium production and trade since the 1950s.

Cybercrime groups using the same secluded sites as drug traffickers is no coincidence. The agency cited deep ties between groups that conduct cybercrimes and those that engage in other criminal activities such as human trafficking, illegal drug trade, pornography, prostitution and money laundering.

The cybercrime ecosystem enables syndicates to hold thousands of trafficked IT workers hostage and force them to carry out online scams - and keep governments and law enforcement agencies away from the compounds. The U.N. Human Rights Office estimated last year that scam centers in Myanmar and Cambodia held about 120,000 and 100,000 victims against their will, respectively. (see: Cambodian Scam Compounds Emerging as Growing Cybercrime Hubs)

According to the U.N. team, which previously warned about cybercrime syndicates using a network of casinos, money laundering and underground banking networks to hide their illegal proceeds, the syndicates are investing massive amounts of money to set up stable networks consisting of vast physical and internet communication technology infrastructure to make their operations more efficient.

These syndicates also look for service-based business models in underground markets, driving a major demand for cryptocurrency solutions, deepfake technologies, generative AI-as-a-service solutions and virtual asset services, most of which are offered for sale through hundreds of underground markets and forums on Telegram.

References to AI-enabled content and deepfakes in online criminal forums have grown 600% in 2024.

"The integration of generative artificial intelligence by transnational criminal groups involved in cyber-enabled fraud is a complex and alarming trend observed in Southeast Asia, and one that represents a powerful force multiplier for criminal activities," said John Wojcik, U.N. regional analyst. "These developments have not only expanded the scope and efficiency of cyber-enabled fraud and cybercrime, they have also lowered the barriers to entry for criminal networks that previously lacked the technical skills to exploit more sophisticated and profitable methods.”