UN Reveals Southeast Asian Criminal Syndicates Leverage Crypto, Telegram

Southeast Asian criminal organizations are increasingly using Telegram to facilitate global online scams, defrauding billions from unsuspecting victims, according to a new UN Office for Drugs and Crime (UNODC) report. The syndicates, many of which operate on an international scale, primarily rely on cryptocurrency for their illegal activities, particularly Tether’s stablecoin USDT. The report also highlights deepfake technology as another major technological development that has been aiding criminal networks.

Telegram’s encryption and lack of moderation have made it a popular tool for criminal operations. According to UNODC, this platform has become a major hub for trading hacked data, including browser histories, passwords and credit-card information.

The UNODC report also notes that illegal data markets are increasingly moving to Telegram, with vendors specifically targeting international organized criminal groups in southeast Asia. These criminal groups, often operating from heavily fortified compounds and staffed by trafficked workers, generate around $36.5 billion a year. However, a separate study from the U.S. Institute for Peace estimates that the total revenue from these scams may exceed $64 billion annually.

Pavel Durov, the founder of Telegram, was detained in August in Paris and charged with facilitating criminal activity on the app, including the distribution of child-sexual-abuse images. His arrest has sparked debate about the responsibilities of app providers when it comes to policing illegal activities as well as raising questions about the balance between the need for law enforcement and freedom of speech.

After his detention, Durov pledged to eliminate Telegram features that criminals had been abusing and declared that the platform would begin giving police access to user IP addresses and phone numbers upon legal request.

The report emphasizes that criminal organizations in the region have been forced to innovate due to the massive profits they generate. These groups have integrated advanced technologies, such as deepfakes, artificial intelligence (AI) and sophisticated malware into their operations. UNODC identified more than 10 service providers offering deepfake technology to organizations involved in cyber fraud across southeast Asia.

Responses to these scams have varied across southeast Asian countries. In Laos, officials were initially reluctant to intervene in criminal activities within special economic zones (SEZs). However, pressure from the Thai government eventually led Lao authorities to negotiate the release of trafficked Thai workers.

Cambodia has taken a similar approach, with police requesting the release of specific individuals from scam centers. Myanmar, however, faces significant challenges due to legal complexities and ongoing conflict, making it difficult to rescue victims of human trafficking.

While in previous years most workers in these scam compounds were trafficking victims, the situation appears to have shifted. In 2023, some individuals voluntarily entered these operations, drawn by promises of high salaries and commissions in Myanmar. Unfortunately, many still end up exploited, unable to escape once they realize the dangers.

The release of such reports stresses how important it is for crypto industry actors, including HIVE Blockchain Technologies Ltd. (NASDAQ: HIVE) (TSX.V: HIVE), to constantly guard against the use of their products and services by illicit actors from around the world.

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