US Treasury Sanctions Cambodian Tycoon Over Crypto Fraud and Trafficking Links

  news.bitcoin.com 13 September 2024 06:33, UTC

The U.S. Department of the Treasury has imposed sanctions on Cambodian tycoon Ly Yong Phat and his businesses, linking them to human trafficking and forced labor scams involving cryptocurrency fraud. Victims were manipulated into online scam centers, and trafficked workers were forced into labor for these schemes. The sanctions freeze U.S.-based assets and prohibit transactions, aiming to hold perpetrators accountable for these abuses.

U.S. Treasury Sanctions Cambodian Businessman for Cyber and Crypto Fraud

The U.S. Department of the Treasury announced on Thursday that it is sanctioning a “Cambodian tycoon and businesses linked to human trafficking and forced labor in furtherance of cyber and virtual currency scams.” Cambodian businessman Ly Yong Phat, his conglomerate L.Y.P. Group, and several properties, including O-Smach Resort, have been linked to extensive human rights abuses involving trafficked workers forced into labor for online scam centers focused on cryptocurrency fraud.

According to the Treasury’s Office of Foreign Assets Control (OFAC), many of these scams, including those run by Ly’s businesses, involve victims being manipulated into investing in virtual currency or foreign exchange schemes under false pretenses. The Treasury detailed:

In many cases, this involves convincing victims to invest in virtual currency, or in some cases, over-the-counter foreign exchange schemes, all with the intent of defrauding them of their funds. These scams are largely perpetrated by criminal organizations based in Southeast Asia.

The FBI’s Internet Crime Complaint Center reported significant increases in losses related to cryptocurrency investment scams, rising 53% from $2.57 billion in 2022 to $3.96 billion in 2023.

“Today’s action underscores our commitment to hold accountable those involved in human trafficking and other abuses,” said Acting Under Secretary for Terrorism and Financial Intelligence Bradley T. Smith. Traffickers operating in Southeast Asia force victims, including trafficked workers at O-Smach Resort, to conduct these cyber scams. The Trafficking in Persons (TIP) Report published in 2024 highlighted forced labor abuses, noting that traffickers often resell victims or subject them to physical and mental abuse.

The sanctions block all U.S.-based assets of Ly and his businesses, prohibiting U.S. persons from engaging in transactions involving these entities. This includes dealing with cryptocurrency, funds, or services linked to the designated persons. OFAC’s actions are pursuant to Executive Order 13818, expanding on the Global Magnitsky Human Rights Accountability Act, which seeks to combat serious human rights abuses and corruption, particularly those linked to virtual currency and fraudulent investment schemes.

What do you think about the U.S. Treasury’s sanctions against Ly Yong Phat and his businesses? Let us know in the comments section below.

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