Last month, the United States and United Kingdom mounted one of the largest coordinated law enforcement operations ever conducted targeting Southeast Asia-based actors, taking aim at the finances of a major network in the region’s cyber-scamming industry. The U.S. Treasury sanctioned 146 individuals and entities linked to Cambodia’s Prince Group, chaired by businessman Chen Zhi, and unsealed indictments alleging that companies tied to the conglomerate were involved in online fraud, human trafficking, and money laundering. Investigators seized 127,000 bitcoins worth around $14 billion, while the United Kingdom froze high-value real estate in London.

Over the past decade, online fraud operations across Southeast Asia have generated vast profits while defrauding victims around the world. Americans alone lost an estimated $10 billion to these scams in 2024.

The U.S.-U.K. measures suggest the fusion of political power, private wealth, and illicit enterprise in Cambodia – a pattern repeated across the region. In the weeks since, governments implicated in the scam economy have moved to signal action. Yet those efforts are constrained by a deeper problem: these illicit industries are woven into the fabric of political and economic power itself, making genuine enforcement perilous for regimes that depend on them.

Southeast Asia and the Globalized Illicit Economy

The rise of Southeast Asia’s scam economy can be traced to the convergence of at least three forces. The first is the entrenched systems of rent extraction and protection that have long shaped governance across the region. The second is the surge of Chinese gray capital after 2010, as money flowed offshore through real estate, casinos, and online gambling ventures that blurred the line between speculation and crime. The third is the rapid expansion of digital and crypto-based finance, which allowed illicit profits to circulate globally through opaque and weakly regulated payment systems.

Each of these forces evolved independently, but together they transformed online fraud from small, decentralized criminal ventures into a transnational industry embedded within political and economic power.

Across much of Southeast Asia, power rests on personal authority and control over resources rather than on formal institutions. Politicians and officials rely on business allies, military officials, and local brokers to raise money, deliver loyalty, and manage disputes.