Imagine a place where the government banned cryptocurrency, yet billions of dollars still flow through it every year. That is the reality of Cambodia, a Southeast Asian nation that has become the epicenter of a sophisticated underground crypto ecosystem. This isn't just about people buying Bitcoin for savings. It is a criminal industrial complex built on human trafficking, forced labor, and massive money laundering operations. While neighboring countries like Vietnam and Thailand are building regulated frameworks, Cambodia’s market has been dominated by transnational criminal organizations (TCOs) that exploit regulatory gaps and weak enforcement to process illicit funds from around the globe.
The Rise of the Underground Market
To understand how this happened, we have to look back at the regulatory vacuum. In 2019, the National Bank of Cambodia (NBC) issued Directive No. 1125, effectively banning all cryptocurrency transactions. The goal was to protect consumers and maintain financial stability. However, instead of stopping crypto use, the ban pushed it entirely underground. According to Standard Insights' 2025 report, despite the prohibition, 10.63% of Cambodians continued using cryptocurrency. This statistic reveals a critical truth: when demand exists but legal supply is blocked, criminals step in to fill the void.
This underground market didn't stay small. It evolved into a multi-billion dollar industry dominated by entities like Huione Guarantee (also known as Huiwang Group). Founded in 2014, Huione established what blockchain analytics firm Elliptic described as a "one-stop crime platform." They offered technology tools, personal information services, and money laundering solutions specifically targeting cryptocurrency fraud rings across Southeast Asia. Chainalysis data shows that between August 2021 and January 2025, Huione laundered at least $4 billion. This included $37 million linked to North Korean cyber thefts, $36 million from virtual currency investment scams, and roughly $300 million from other cybercrime activities.
The Role of Scam Compounds and Forced Labor
What makes Cambodia's underground crypto scene uniquely dangerous is its direct integration with human trafficking. Unlike traditional money laundering operations that happen behind computer screens, much of the fraud generation occurs in physical locations known as scam compounds. These facilities function as violent forced labor camps. Workers are trafficked from various countries under false promises of high-paying jobs, only to be held captive and forced to perpetrate cryptocurrency investment fraud.
The Prince Group, led by Chen Zhi, operates some of the most notorious of these compounds. The U.S. Department of Justice identified several key sites in a civil complaint filed on October 14, 2025. One major facility is the 'Jinbei Compound,' associated with the Jinbei Hotel and Casino in Sihanoukville. Another is located in Chrey Thom, known as the 'Golden Fortune Science and Technology.' Inside these compounds, workers face 18-hour days, strict quotas, and physical punishment if they fail to meet their fraud targets. Former workers interviewed by PANE News Lab describe being subjected to violence and threats against their families if they attempted to escape or refused to scam victims.
| Entity | Role | Estimated Illicit Volume | Primary Activity |
|---|---|---|---|
| Huione Guarantee | Money Laundering Platform | $4 Billion+ (Aug 2021 - Jan 2025) | Processing funds from scams, gambling, and cybercrime |
| Prince Group | Scam Compound Operator | Part of $15B seizure (Oct 2025) | Human trafficking, forced labor, investment fraud |
| Brooklyn Network | Fund Transfer Channel | $18 Million+ (2021-2022) | Moving stolen US victim funds to Prince Group accounts |
Technical Infrastructure and Money Laundering Techniques
The technical side of these operations is surprisingly sophisticated. Initially, Huione operated openly on Telegram, offering services to third-party vendors and fraud rings. However, after Telegram blocked their platform in May 2015, they moved to more encrypted channels. Their laundering methodology involves creating multiple layers of transactions across major cryptocurrency exchanges to obscure the origin of funds.
Data obtained by South Korean lawmakers from the Financial Supervisory Service (FSS) highlights the scale of these flows. Transfers between five major Korean cryptocurrency exchanges and Huione Guarantee reached 12.8 billion won (approximately $8.9 million USD) in 2024. This represents a staggering 1,400-fold increase from the same period in 2023, which saw only 9.22 million won in transfers. Even after regulatory scrutiny intensified in late 2024, the network showed resilience, with transactions reaching 3.15 billion Korean Won as of October 20, 2025. This growth trajectory indicates that these networks can adapt quickly to exchange suspensions and regulatory pressure.
The infrastructure also relies on connections to "illegal banks and underground money houses," as referenced in court documents related to Chen Zhi. By integrating illicit crypto flows with legitimate-looking business enterprises-such as casinos, hotels, and retail businesses-the Prince Group creates a diversified revenue model that is difficult for authorities to untangle. TRM Labs documented the 'Brooklyn Network,' which moved more than $18 million from U.S. victims directly back to Prince Group accounts in Cambodia between 2021 and 2022, demonstrating the global reach of these transfer mechanisms.
Regulatory Evolution and Enforcement Actions
The regulatory landscape in Cambodia has shifted dramatically in recent years. After years of a blanket ban, the NBC introduced Prakas B7-024-735 Prokor in late 2024. This new framework moved towards a permission-based licensing system. While intended to legitimize the market and bring it under control, Lightspark's 2025 regulatory analysis noted that this permissive stance inadvertently created new opportunities for sophisticated money launderers to operate under partial regulatory cover. Criminal networks exploited the ambiguity to continue their operations while appearing compliant.
However, international pressure has mounted significantly. The U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) specifically targeted Huione in its enforcement actions. The climax of this effort came in October 2025, when the U.S. Department of Justice initiated civil forfeiture proceedings against Prince Group assets. In coordination with the U.K., authorities seized approximately $15 billion in bitcoin, marking the largest forfeiture in U.S. history according to TRM Labs. This action sent a clear signal that international cooperation is intensifying against these transnational criminal organizations.
Impact on Victims and Global Implications
For ordinary users, the implications are severe. Jacob Sims, a visiting fellow at Harvard's Asia Center, noted that these operations represent "the top form of financial crime impacting Americans now and maybe ever in history," rivaling the global drug trade in terms of gross profits. Ordinary Americans lost an estimated $10 billion to cyber scammers last year, with Southeast Asian operations being the primary source.
Victim experiences, documented through Reddit discussions and legal filings, show a pattern of devastating losses. Individuals reported losing between $5,000 and $250,000 after being lured by promises of high returns on cryptocurrency investments. Scammers contact victims via messaging apps, claiming to have made money investing in crypto or foreign exchange markets. Once trust is established, victims are directed to fake platforms that mimic legitimate exchanges like Binance and Kucoin. Withdrawals are then blocked, and threats are issued if victims attempt to dispute the charges. Trustpilot reviews for Huione-related services, archived before takedown, showed an average 1.2-star rating, with common complaints about immediate account freezing and threats upon withdrawal requests.
Future Outlook and Risk Mitigation
Despite the massive seizures and regulatory shifts, the underground market remains resilient. Transactions with Huione continued to grow into 2025, suggesting that while heads are cut off, the body adapts. Future trajectories point toward either complete eradication through sustained multinational enforcement or further evolution into more decentralized laundering mechanisms. The NBC's exploration of a Central Bank Digital Currency (CBDC), announced in 2019, may eventually provide a legitimate alternative that reduces demand for underground crypto services, but this transition is expected to take several years.
For individuals and businesses engaging with cryptocurrencies in this region, due diligence is paramount. Understanding the signs of scam compounds, recognizing fake exchange interfaces, and verifying the legitimacy of counterparties are essential skills. As long as regulatory gaps exist and enforcement is fragmented, the underground crypto trading ecosystem in Cambodia will remain a significant threat to global financial security.
Is cryptocurrency legal in Cambodia?
The status is complex. The National Bank of Cambodia (NBC) initially banned all cryptocurrency transactions in 2019 via Directive No. 1125. However, in late 2024, the NBC introduced Prakas B7-024-735 Prokor, shifting to a permission-based licensing system. While this allows for regulated activity, the vast majority of crypto trading in Cambodia remains underground and is heavily associated with illegal activities such as money laundering and fraud.
What is the role of the Prince Group in Cambodia's crypto scene?
The Prince Group, led by Chen Zhi, is one of the largest transnational criminal organizations in Asia. They operate numerous scam compounds across Cambodia, including the Jinbei Compound in Sihanoukville. These facilities use forced labor to conduct cryptocurrency investment fraud. The group also integrates these illicit funds with legitimate businesses like casinos and hotels to launder money. In October 2025, the U.S. DOJ seized approximately $15 billion in bitcoin linked to the Prince Group.
How does Huione Guarantee facilitate money laundering?
Huione Guarantee acts as a "one-stop crime platform" providing money laundering services for cryptocurrency fraud rings. Between August 2021 and January 2025, they laundered at least $4 billion. They use multi-layered transaction techniques across major exchanges to obscure fund origins. They also offer support for cybercrime, illegal gambling, and sanction evasion, making them a central hub for illicit crypto flows in Southeast Asia.
Are there risks for investors interacting with Cambodian crypto entities?
Yes, the risks are extremely high. Many entities operating in Cambodia's crypto space are involved in fraud, human trafficking, and money laundering. Victims often lose their entire investment after being lured by fake platforms mimicking legitimate exchanges. Additionally, engaging with these networks can expose individuals to legal risks due to their association with illicit funds. Regulatory warnings from the NBC and international bodies highlight the prevalence of investment fraud in this region.
What is the current state of enforcement against these networks?
Enforcement has intensified significantly in 2025. The U.S. Department of Justice, in coordination with the U.K., executed the largest bitcoin forfeiture in U.S. history ($15 billion) targeting the Prince Group. FinCEN has also taken specific actions against Huione Guarantee. Despite these efforts, underground networks remain adaptable, with transaction volumes continuing to grow as they shift to more encrypted and decentralized methods to evade detection.
