The Financial Action Task Force (FATF), an international body setting global standards to combat money laundering, published a report identifying virtual assets, especially stablecoins, as a significant conduit for laundering proceeds from scam compounds operating in Southeast Asia.
FATF highlights swift laundering techniques
FATF, based in Paris, outlined how criminal networks leverage digital assets to rapidly move illicit funds across borders. The report describes how victims’ money can be extracted from accounts and transferred to a destination in as little as two to five minutes, exploiting the speed of modern payment systems. By comparison, many victims only realize their funds are missing after an average delay of about 20 hours, allowing criminals to complete transactions long before authorities are alerted.
The organization noted that these operations are often orchestrated on social media and messaging platforms, where fraudsters coordinate logistics, recruit accomplices, and identify targets. The process typically unfolds during a short “payment window,” during which the actual theft and transfer occur.
Seven distinct stages of laundering were identified, beginning with initiation on popular online platforms and ending with the integration of proceeds into the formal economy, frequently through virtual assets.
The report follows FATF’s recent update on virtual assets, which found that the majority of tracked illicit blockchain activity now involves stablecoins rather than other cryptocurrencies.
Cambodia’s Huione Group under scrutiny
The report draws particular attention to a Cambodia-based organization, Huione Group, alleged to have laundered at least $4 billion between 2021 and 2025. Authorities linked the group to both fraud networks and cyber theft activities attributed to North Korean actors. Analysts have characterized the Huione Group’s online platform as possibly the largest illegal marketplace of its kind, with connected cryptocurrency wallets receiving a total of at least $24 billion.
In 2025, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) took steps to sever Huione’s access to the American financial system. The agency also flagged the involvement of the group’s USDH stablecoin, which had been designed to resist standard freezing mechanisms implemented by most stablecoin issuers.
Mini dictionary: The Financial Action Task Force (FATF) is an intergovernmental organization founded in 1989 to combat money laundering and terrorist financing. Stablecoins are cryptocurrencies designed to maintain a stable value by pegging to assets like the US dollar, making them attractive for illicit transfers due to their price consistency.
| Group | Location | Laundered (2021-2025) | Linked Wallets’ Inflow | US Regulatory Response |
|---|---|---|---|---|
| Huione Group | Cambodia | $4 billion | $24 billion | Cut from US system, USDH flagged |
Governments urged to intensify efforts
FATF recommended governments and financial institutions disrupt illegal fund flows by taking coordinated action from the outset of an incident through its final stages. The agency called for increased information-sharing between banks, telecommunications providers, and technology companies. Authorities were advised to intervene within the first 24 to 72 hours after fraudulent activity is detected, a period when funds are still likely to be recoverable.
FATF President Giles Thomson highlighted the evolving nature of these operations, pointing out that criminal groups are now utilizing artificial intelligence and emerging technologies to expand their scams. He called on governments and institutions to “urgently modernise and accelerate our response.”
FATF President Giles Thomson stated that the criminal use of AI and other technologies poses new challenges, emphasizing that authorities worldwide need to modernize and act more quickly to counter online scam networks.
Law enforcement agencies traced individuals from at least 80 jurisdictions to scam compounds in Southeast Asia. Many of those involved are victims of human trafficking forced to participate in fraudulent activities. The report estimated that in Myanmar alone, approximately 120,000 people are compelled to work in online scam operations.
Law enforcement data indicate that a substantial share of participants in scam compounds are trafficking victims, with reports showing tens of thousands subjected to forced labor in these operations across the region.
