Underground Crypto Trading in Cambodia: Scams, Laundering, and the 2025 Crackdown

Imagine a market where buying digital currency isn't just risky-it’s potentially life-threatening. For years, underground crypto trading in Cambodia wasn't just about speculative investing; it was the financial engine for some of the world's most brutal criminal networks. While you might be reading this from the safety of your home, thousands of people were trapped in "scam compounds," forced to run fraudulent investment schemes under threat of violence. The story of crypto in Cambodia is not one of technological innovation, but of regulatory evasion, human trafficking, and billions of dollars in laundered funds.

The Regulatory Vacuum That Created a Crime Hub

To understand why Cambodia became a hotspot for illicit crypto activity, we have to look at how the rules changed-or rather, didn't change. In 2019, the National Bank of Cambodia (NBC) issued Directive No. 1125, effectively banning all cryptocurrency transactions. On paper, this seemed like a move to protect citizens. In reality, it created a perfect legal vacuum.

When legitimate exchanges are banned, traders don't stop; they go underground. This prohibition pushed the market into the shadows, where oversight was non-existent. According to Standard Insights' 2025 report, despite the ban, 10.63% of Cambodians continued using cryptocurrency. These weren't just casual users; many were connected to sophisticated networks that thrived on the lack of transparency. The ban didn't kill the demand; it just removed the guardrails.

This environment allowed transnational criminal organizations to set up shop with minimal interference. They built infrastructure that blended illegal gambling, human trafficking, and crypto fraud into a single, diversified revenue model. By late 2024, the NBC attempted to pivot with Prakas B7-024-735 Prokor, introducing a permission-based licensing system. But by then, the underground ecosystem was already deeply entrenched, and these new regulations inadvertently provided a thin veneer of legitimacy that criminals exploited further.

The Kingpins: Huione Guarantee and the Prince Group

You can't talk about underground crypto in Cambodia without mentioning two names: Huione Guarantee (also known as Huiwang Group) and the Prince Group. These entities formed the backbone of the region's illicit crypto economy.

Huione Guarantee operated what Elliptic described as a "one-stop crime platform." Founded in 2014, it offered technology tools, personal information, and money laundering services specifically targeting cryptocurrency fraud rings across Southeast Asia. Chainalysis data reveals that between August 2021 and January 2025, Huione laundered at least $4 billion. Break that down, and you see the scope of the operation:

• $37 million from North Korea-linked cyber thefts.
• $36 million from virtual currency investment scams.
• Approximately $300 million from other cybercrime activities.

Meanwhile, the Prince Group, led by Chen Zhi, provided the physical infrastructure. They operated at least ten scam compounds across Cambodia, including the infamous 'Jinbei Compound' linked to the Jinbei Hotel and Casino in Sihanoukville. These weren't just offices; they were violent forced labor camps. Workers were trafficked into these centers, often lured by false job promises, and then forced to work 18-hour days perpetrating crypto scams. If they failed to meet daily fraud quotas, they faced physical punishment.

The U.S. Department of Justice highlighted this connection in a civil complaint filed on October 14, 2025 (Case 1:25-cv-05745). Internal documents from Prince Group executives explicitly mentioned "BTC laundering" and connections to "illegal banks and underground money houses." This wasn't accidental overlap; it was a deliberate integration of human trafficking and financial crime.

How the Underground Market Operates

The technical side of this underground trading network is surprisingly sophisticated. It relies heavily on encrypted communication channels and multi-layered laundering techniques designed to evade detection.

Initially, Huione Group used Telegram to coordinate its operations, offering vendors and buyers a centralized hub for illicit services. However, after Telegram blocked their platforms in May 2015, the operations moved deeper into encrypted, decentralized channels. This resilience shows how adaptable these networks are when pressured.

Transaction patterns reveal the scale of the flow. Data obtained by South Korean lawmakers from the Financial Supervisory Service (FSS) showed that transfers between five major Korean cryptocurrency exchanges and Huione Guarantee exploded from 9.22 million won in early 2023 to 12.8 billion won (about $8.9 million USD) in 2024. That is a 1,400-fold increase in just one year. Even as regulatory scrutiny increased in late 2024, transactions continued to grow, reaching 3.15 billion Korean Won by October 2025.

The laundering process typically involves several steps:

1. Acquisition: Fraudsters steal funds or trick victims into sending crypto via fake investment platforms.
2. Mixing: Funds are moved through multiple wallets and mixing services to obscure the trail.
3. Layering: Transactions are split across various exchanges and jurisdictions to confuse auditors.
4. Integration: Cleaned funds are deposited into seemingly legitimate businesses, such as casinos or hotels owned by the Prince Group.

This method allows criminals to convert illicit digital assets into usable fiat currency while maintaining plausible deniability. The "Brooklyn Network," documented by TRM Labs, demonstrated this global reach by moving more than $18 million from U.S. victims directly back to Prince Group accounts in Cambodia between 2021 and 2022.

Victim Impact: The Human Cost of Crypto Scams

Behind every dollar laundered is a victim. The impact of underground crypto trading in Cambodia extends far beyond local borders. Ordinary Americans lost an estimated $10 billion to cyber scammers in 2024 alone, with Southeast Asian operations being the primary source.

Scammers typically contact victims via messaging apps, claiming to have made significant profits investing in cryptocurrency or foreign exchange markets. They lure targets into high-yield investment schemes that never materialize. Reddit discussions from September 2025 document individual losses ranging from $5,000 to $250,000. These aren't small amounts; for many, this represents a lifetime of savings.

But the human cost goes deeper. The workers inside the scam compounds are also victims. A former worker interviewed by PANE News Lab described being trafficked to Cambodia under false pretenses. Once there, their phones and passports were confiscated. They were forced to call potential victims, running scripts written by managers. Failure meant beatings. Escape was nearly impossible due to the remote locations and armed guards.

Support for these victims is virtually non-existent. The NBC's warnings against crypto fraud offer general advice but no specific recovery mechanisms. Most victims find themselves navigating a complex international legal landscape with little hope of retrieving their funds.

Comparison: Cambodia vs. Neighboring Markets

As the table shows, Cambodia's situation is unique. While Vietnam and Thailand have moved toward regulated, compliant markets, Cambodia's underground sector remained tightly integrated with physical crime scenes-the scam compounds. This direct link between financial fraud and human rights abuses distinguishes it from other regional markets where risks are primarily financial or regulatory.

The 2025 Crackdown: A Turning Point?

For years, these networks operated with impunity. But 2025 marked a significant shift. Coordinated international enforcement actions began to dismantle the infrastructure of these criminal enterprises.

The U.S. Department of Justice's October 14, 2025 filing initiated civil forfeiture proceedings against Prince Group assets. More dramatically, the U.S., in coordination with the U.K., seized approximately $15 billion in bitcoin. TRM Labs called this the largest forfeiture in U.S. history. This action signaled a clear message: the era of unchecked underground crypto trading in Cambodia was coming to an end.

However, the networks are resilient. Despite the crackdown, transactions with Huione continued to grow into late 2025. Jacob Sims, a visiting fellow at Harvard's Asia Center, warned that without sustained multinational effort, these operations could "continue to rival the global drug trade in terms of gross profits." The adaptability of these groups means they may evolve into more decentralized, harder-to-track mechanisms.

The NBC's exploration of a Central Bank Digital Currency (CBDC), announced in 2019, offers a potential long-term solution. A legitimate, state-backed digital currency could reduce the demand for underground services by providing a safe alternative for remittances and payments. But given Cambodia's current regulatory infrastructure, this transition will take years.

What This Means for You

If you're involved in cryptocurrency, whether as an investor or a business owner, the story of Cambodia serves as a stark warning. Here are key takeaways to protect yourself:

• Verify Your Counterparty: If an exchange or service has weak regulatory oversight, proceed with caution. Check if they are licensed by reputable authorities.
• Beware of High-Yield Promises: Legitimate investments don't guarantee massive returns. If it sounds too good to be true, it likely is.
• Monitor Transaction Patterns: Unusual spikes in volume or transfers to obscure wallets can be red flags for money laundering.
• Stay Informed on Regulations: Keep up with changes in laws like Cambodia's Prakas B7-024-735 Prokor, which can create new vulnerabilities.

The underground crypto market in Cambodia is a complex web of crime, corruption, and coercion. While recent crackdowns have dealt significant blows, the fight is far from over. Understanding these dynamics helps us recognize the risks and support efforts to bring transparency and justice to the digital asset space.