A new report from a U.S. think tank says industrial-scale cyber-fraud operations embedded in Southeast Asia’s special economic zones now generate an estimated $50 billion to $75 billion per year, and should be considered a hybrid security threat rather than a consumer-protection issue.

The report, published by the New Lines Institute for Strategy and Policy, outlines how Chinese-led criminal syndicates have transformed deregulated Special Economic Zones (SEZs) across Myanmar, Cambodia, Laos, and the Philippines into “global epicenters” of cyber-enabled fraud. The study maps five SEZ-linked ecosystems: Laos’s Golden Triangle SEZ, Myanmar’s Shwe Kokko and KK Park compounds in Kayin State, Cambodia’s Sihanoukville and Thmor Da, the Philippines’ Clark Freeport, and East Timor’s Oecusse Digital Trade Zone. 

In Cambodia, scam revenues are estimated at $12.5 billion to $19 billion annually, equivalent to as much as 60 percent of formal GDP. In Myanmar, the pro-junta Karen Border Guard Force earns roughly $192 million a year leasing land and providing security to scam operators while phone-tracking data has linked compounds directly to Myanmar military centers. Some compounds, the report notes, have continued operating under blackout conditions using Starlink satellite terminals.

The criminal enterprises typically exploit sophisticated laundering networks built on USDT and other stablecoins, over-the-counter brokers, casino junket accounts, and real-estate purchases, the institute said. 

According to the report, funds extracted from victims, typically via bank transfers or direct crypto payments, are converted almost immediately into stablecoins and routed through dozens of wallets to obscure their origin. Over-the-counter brokers in Cambodia, Laos, and the Philippines act as informal clearinghouses, swapping crypto for local currencies or Chinese renminbi while evading know-your-customer checks, with offshore mixers adding further layers of opacity. 

Philippine offshore gaming operator (POGO) hubs in metro Manila and Luzon have imitated the Mekong model and laundered proceeds through local banks and real-estate markets under the protection of corruption networks, the institute said. 

Much of this activity is intermediated by Cambodia’s Huione Group, which combines a payments firm (Huione Pay), a virtual-asset service provider (Huione Crypto), and a Telegram-based “guarantee” marketplace formerly known as Huione Guarantee and later rebranded Haowang Guarantee. Citing the U.S. Financial Crimes Enforcement Network, the report said the broader Huione network laundered at least $4 billion in illicit proceeds between August 2021 and January 2025, while blockchain analytics firm Elliptic estimates Huione Guarantee/Haowang-related wallets have received at least $24 billion in crypto. 

In the final, integration phase, funds are cashed out through payment services or OTC brokers and reinvested into ostensibly legitimate businesses and assets, the report said. 

The problem of growing scam centers is also complicated by the fact that many who work in them are not willing criminals. Trafficked workers are lured by fake job postings from across South and Southeast Asia, and increasingly from Africa, the report said. Once captive, they are often confined behind high walls, stripped of their passports, and forced to run romance scams, “pig-butchering” investment fraud, and extortion pipelines. Survivors in Myanmar have alleged that underperforming workers face forced organ harvesting.

The report argues that arresting and deporting compound workers, rather than screening them as trafficking victims, both violates the U.N. Palermo Protocol’s non-punishment principle and undermines investigations by ending access to insiders who know command structures and money flows.

The institute separately describes China as a “source, victim, and selective enforcer.” Chinese-led syndicates dominate compound operations, but Beijing has also coordinated repatriations of Chinese nationals, opened a joint anti-fraud center with Thailand in 2025, and in late 2025 sentenced 11 people to death over a $1.4 billion Myanmar-border scam syndicate. Even so, the report says, Beijing’s enforcement is “uneven and often reactive,” focused on cases involving Chinese citizens.

Its policy recommendations call on Washington to formally treat large-scale scam ecosystems as a hybrid security threat encompassing organized crime, human trafficking, illicit finance, and where applicable, conflict financing.