The multi-billion dollar cyber fraud industry is expanding in Southeast Asia as criminals adopt new technologies

Bangkok (Thailand), October 7, 2024 – A new report launched today found that Asian crime syndicates have integrated new service-based business models and technologies, including malware, generative artificial intelligence (AI) and deepfakes, into their operations while creating new underground markets and cryptocurrency solutions have set up for their money laundering needs.

The report, titled Transnational Organized Crime and the Convergence of Cyber ​​Fraud, Underground Banking and Technological Innovation: A Changing Threat Landscape, is the second in a series of ongoing threat assessments produced by the UN Office on Drugs and Crime (UNODC).

“Organized crime groups are converging and exploiting vulnerabilities, and the evolving situation is rapidly outpacing the ability of governments to contain it,” said Masood Karimipour, UNODC Regional Representative for Southeast Asia and the Pacific. “By taking advantage of technological advances, criminal groups are producing larger-scale and harder-to-detect fraud, money laundering, underground banking and online scams. This has led to the creation of a criminal services economy, and the region has now become a major testing ground for transnational criminal networks looking to expand their influence and diversify into new industries.”

The report outlines recent cases showing how under-regulated online gambling platforms and increasingly high-risk and often unauthorized virtual asset service providers (VASPs) that have proliferated in recent years are being used by major organized crime groups to move, launder billions in criminal activity and integrate. ends up in the financial system without accountability.

The cases examined also show how illegal online casino operators have diversified their business activities to include cyber fraud and cryptocurrency-based money laundering services. Extensive evidence shows the influence of organized crime within casino complexes, special economic zones and border areas to conceal illegal activities.

“It is more important than ever that governments recognize the severity, scale and scope of this truly global threat, and prioritize solutions that address the region’s rapidly evolving criminal ecosystem,” Karimipour added.

Through human trafficking for coerced crime, organized crime groups regularly coerce thousands of workers to defraud victims through illegal scam complexes, often tricking them into these centers with fake job offers.

UNODC estimates financial losses between US$18 billion and US$37 billion in 2023 alone from scams targeting victims in East and South-East Asia, with a large portion of these losses attributed to scams perpetrated by organized crime groups in South-East Asia.

The report also finds an increase in AI-driven crimes involving deepfakes, evidenced by a more than 600% increase in mentions of deepfake-related content targeting criminal groups in Southeast Asia on controlled online platforms in the first half of 2024.

“The integration of generative artificial intelligence by transnational criminal groups involved in cyber fraud is a complex and alarming trend observed in Southeast Asia, and one that represents a powerful force multiplier for criminal activity,” said John Wojcik, regional analyst at UNODC. “These developments have not only increased the scope and efficiency of cyber fraud and cybercrime; they have also lowered the barriers to entry for criminal networks that previously lacked the technical skills to exploit more sophisticated and profitable methods.”

KK Park, Kayin State, Myanmar, June 2019 (top) and June 2024 (bottom). Source: Google Earth and eGeos.

The new technical policy brief describes the mechanisms, intricacies and drivers of the convergence of transnational organized crime in Southeast Asia. It was developed through extensive research and analysis of criminal charges, case files, court records, related disclosures and other data collected over several years in consultation with authorities and partners. Its development involved extensive mapping and analysis of thousands of so-called ‘gray and black business’ online groups, including clear web and dark web forums and marketplaces used explicitly for illegal activities.

Building on the ASEAN Roadmap for regional cooperation to tackle transnational organized crime and human trafficking linked to casinos and fraud operations in Southeast Asia, The study also provides a list of recommendations aimed at strengthening knowledge and awareness, legislation and policy, and enforcement and regulatory responses in the region, aimed at helping governments address the situation.

Click here to access UNODC’s threat assessment on casinos, underground banking and money laundering as of January 2024

Click here to access UNODC’s policy brief on human trafficking for coerced crime and fraud centers from September 2023.

Click here for more information about UNODC’s regional programme.

Click here to learn more about UNODC’s regional program and work against cybercrime.

Click here to learn more about UNODC’s work to tackle human trafficking in the region.