Southeast Asia faces new crypto crime wave, UNODC calls for regional cooperation

• Southeast Asia has pushed to criminalize unlicensed crypto asset service providers (VASPs).
• Transnational organized crime integrates advanced technology and cryptocurrency for illegal activities.
• UNODC is emphasizing regional cooperation and stricter regulations on casinos and cryptocurrency money laundering.

The United Nations Office on Drugs and Crime (UNODC) has released a report calling on Southeast Asian countries to take stronger crypto measures against unlicensed virtual asset service providers (VASPs). The call comes amid an unprecedented campaign against organized crime, especially in areas with high potential for money laundering, such as online gambling, casinos and virtual currencies.

The report notes that criminal activity in the region is becoming increasingly sophisticated, with complex networks taking advantage of emerging technologies such as digital currencies and deepfake technology.

Organized crime’s growing dependence on crypto

Criminal syndicates across Southeast Asia quickly adapted the use of new business models, including technologies such as cryptocurrency. According to a report from UNODC, these groups have gone beyond human trafficking and money laundering to cybercrime, using malware, artificial intelligence and underground crypto markets.

All these trends have made it difficult for governments and law enforcement agencies to keep pace, as crime syndicates have systematically adapted to become adept at moving illicit funds across borders using digital assets.

It has also allowed organized criminal networks to open new types of underground markets, further complicating efforts to monitor and regulate their activities. Southeast Asian governments, especially in the Mekong region, should do more to increase the capacity to monitor these crimes and impose a stricter regulatory environment on virtual asset service providers.

Strengthening regional cooperation

The report calls for a joint approach to such challenges by the countries of Southeast Asia. One recommendation would be the creation of a regional intelligence sharing platform for fraud, cyber-enabled and organized crime related to crypto assets.

UNODC also called for strengthening casino, VASP and other high-risk regulatory regimes, as well as access to suspicious transaction reports for follow-up investigations by governments.

However, the report underlines that fighting cross-border crime requires a regional approach and special attention to crypto, which has become increasingly popular in illegal activities. Improved law enforcement strategies, stronger regulatory frameworks and international cooperation will be needed to counter this emerging threat.

Related reading | Expert Highlights Bitcoin’s Potential to Disrupt Traditional Assets