The recommendation comes amid concerns that some VASPs, including those linked to criminal networks, are facilitating transactions for illegal activities such as fraud and high-risk gambling operations, according to a recent report released by the agency.

Unlicensed exchanges are linked to drug trafficking and cybercrime

The report highlighted that an unnamed entity had conducted transactions worth “at least hundreds of millions of dollars” with criminal organizations.

“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,” said Masood Karimipour, UNODC Regional Representative.

The UNODC recommendations go beyond criminalizing unlicensed VASPs.

This preference is driven by the ease of conducting quick cross-border transactions, the widespread misinformation about how cryptocurrencies work, and the low level of understanding among users.

In some cases, the failure of international law enforcement cooperation and asset recovery has exacerbated the problem.

Online fraud has increased significantly in Southeast Asia and often takes place from nondescript office buildings or casino complexes.

The report also identified an increase in other scams, including impersonation, job fraud, asset recovery schemes and phishing attacks.

The scammers are also increasingly using emerging technologies such as artificial intelligence and deepfakes to increase the effectiveness of their schemes.

In September alone, more than 10,000 people lost more than $46 million to such scams, as reported by Scam Sniffer, a Web3 anti-scam platform.

The platform revealed that 10,805 victims suffered losses amounting to $46.7 million in the past month due to various crypto-phishing scams.

The post UN calls on Southeast Asia to crack down on unlicensed crypto exchanges appeared first on Cryptonews.