Interpol Elevates Scam-Compound Network to Global Threat as Crypto Fraud Spreads

Interpol has formally recognized crypto-related fraud now sits at the core of a sprawling scam-compound industry, designating the network a transnational criminal threat as global law-enforcement agencies move to tighten coordination around its financial flows.

Member countries of the International Criminal Police Organization approved a resolution at its General Assembly in Marrakech this week, according to a public statement.

The organization said the networks rely on human trafficking, online fraud, and coerced labor, and now affect victims from more than sixty countries.

“Often under the pretext of lucrative overseas jobs, victims are trafficked into compounds where they are forced to carry out illicit schemes such as voice phishing, romance scams, investment fraud, and cryptocurrency scams targeting individuals worldwide,” the organization said.

The resolution describes criminal groups recruiting victims with fake job offers and transporting them to compounds where they are forced to conduct investment schemes, romance scams, and crypto fraud, among other illegal or criminal activities.

Interpol said the groups operating these scam centers use advanced technologies “to deceive victims and mask their operations” with the cross-border criminal networks operating with a “highly adaptive nature.”

The scam center model first drew international attention in Southeast Asia, where compounds in Myanmar, Cambodia, and Laos were documented as sites of large-scale trafficking and coerced online fraud.

Victims of human trafficking related to the scams originated from the region, as well as from China and India, beginning sometime in January 2023.

By May of the same year, it had spread to certain regions in Russia, parts of Colombia, East African coastal countries, as well as parts of the UK, as observed in a separate Interpol report.

Pig-butchering operations

The criminal network’s ties to crypto were first revealed in July last year, when an online marketplace operated by Huione Group, a Cambodia-based financial conglomerate headquartered in Phnom Penh, was found to have processed more than $11 billion in crypto transactions connected to scam compound operators.

By May earlier this year, the U.S. Treasury had moved to cut off the group from the U.S. financial system after alleging more than $4 billion in laundering activity tied to scam compound operations.

“A few years ago, flows from pig-butchering operations followed relatively predictable paths through mainstream exchanges. Today, they are far more reliant on stablecoins, low-fee chains, and rapid cross-chain swaps to fragment movement and buy time,” Ari Redbord, a former Treasury Department official now working as global head of policy at blockchain intelligence firm TRM Labs, told Decrypt.

TRM Labs has also seen “heavier use of Chinese money-laundering networks, OTC brokers, and informal cash-out infrastructure—all of which help operators move value outside the reach of traditional financial controls,” Redbord added.

“But the story isn’t one-sided: as law-enforcement attention has intensified, scam networks have changed how they move money, and defenders have gotten faster too,” he said. “That global coordination is the real change.”

Interpol’s resolution is “one part of a broader international shift,” Redbord added. With the U.S. recently launching a strike force, “partners across Asia and Europe” are now “increasingly aligned on typologies linked to trafficking-driven scam compounds.” 

While such networks “thrive on cross-border seams,” those are now “narrowing” such that “action windows that simply didn’t exist a few years ago,” could now be seen, he added.

Coordinated asset tracing to track lost funds isn’t “just feasible,” Redbord said, saying that the process “works when jurisdictions move together.”

“When coordination clicks, you can actually cut off the exits these networks rely on,” he added.