June 25, 2024

Myanmar, along with several Southeast Asian countries, has turned into a center of cyber fraud. Organized crime networks are capitalizing on its ongoing civil conflict and the ineffective governance of neighboring countries such as Cambodia. Despite attempts from China and neighboring governments to eradicate these hubs, the scam rings are constantly moving across the region, thereby evading law enforcement. These illicit activities have swindled countless individuals from within and beyond the region.

The Modus Operandi of Cyber Scams

In these cyber scam centers managed by organized criminal groups, their primary strategy is to defraud individuals of their savings. These groups, mainly from China, established their bases in Southeast Asia’s impoverished states like Cambodia, Laos, and Myanmar. This move came after Beijing initiated an anticorruption drive focusing on unlawful cross-border gambling and money laundering in Macau, a region known for its illegal activities. Macau’s casinos, although illegal in mainland China, have been evident sources of income and a medium for money laundering activities for these organized crime syndicates, according to an article in Brookings.

These cyber scam centers operate with thousands of trafficked individuals, forced to work in appalling conditions. The UN High Commissioner for Human Rights estimates that over 200,000 people are trafficked into Cambodia and Myanmar for these online frauds. Moreover, the trafficking networks reportedly extend beyond the region, recruiting victims from countries like Brazil, Kenya, and the Netherlands.

The Scam Process

In these swindles, the trafficked workers typically connect with their victims, mostly in the United States or China, via online messaging apps. They strive to have a close relationship with them and dupe them into counterfeit investments like bogus cryptocurrencies. This practice is often called “pig butchering.” A recent study disclosed that the victims worldwide lost nearly $75 billion to these cyber scams based in Southeast Asia between 2020 and 2024. The FBI reports that Americans alone have fallen victim to these scams, losing an estimated $2.6 billion in 2022.

Myanmar: A Breeding Ground for Scams

Why is Myanmar a hub for scams? In Myanmar, crime syndicates have thrived in areas bordering China, India, Laos, and Thailand. Tension in these areas increased after a military coup in 2021 ousted the democratically elected government. With this power struggle, the illegal industries of scamming centers have prospered due to the informal taxes imposed by the ethnic armed groups and junta affiliates.

China’s Reaction to Scams

These scam centers’ proliferation has transformed China’s role in Myanmar’s civil war and its ties with the military government. Many victims of cyber scams and trafficking are Chinese citizens, and Beijing’s relationship with Myanmar has been inconsistent due to the junta’s failure to control the scam centers and the ill-treatment of citizens. Several ethnic groups claimed they would eradicate scam centers along the China-Myanmar border after launching an attack on the Myanmar military in late October 2023. This move had the tacit approval of China, suggesting their willingness to endure temporary instability if it meant curbing the trafficking and defrauding of its citizens.

Frequently Asked Questions

What kinds of scams are commonly run from these centers?

These centers typically run scams involving fraudulent investments like counterfeit cryptocurrencies. The process often involves developing close relationships with the victims over time and then tricking them into investing in these bogus ventures.

Why is the majority of these scam centers located in Myanmar?

Myanmar’s socio-political instability due to ongoing civil conflict and tensions between various ethnic groups and the majority, makes it a fertile ground for illegal activities including cyber scams. Moreover, the military junta’s weak governance and corruption allow these activities to thrive.

What has been China’s response to the scams that affect its citizens?

China has tacitly shown support for ends which might terminate these scams, even if it brings temporary instability along its border. Chinese law enforcement is pressuring local ethnic militias to hand over Chinese nationals involved in scams, and to shut down the scam centers.

China, in its crackdown against scam kingpins and victims of human trafficking, has managed to repatriate more than [40,000 citizens](https://www.xhby.net/content/s65f2789ce4b09dde337fafdd.html) according to local reports. This action and its potential effects have kickstarted a ripple effect on crime rings targeting other countries, such as Myanmar.

While China combats its internal issues, crime syndicates have relocated their operations to the eastern region of Myanmar, Karen State, neighboring Thailand. Despite the relocation, these criminal enterprises have relied heavily on Thailand’s resources for their operations. Thailand’s current PM, Sretta Thavisin, has taken note of the problem and addressed it, even aiding in a [joint operation](https://www.reuters.com/world/asia-pacific/thailand-facilitates-transfer-900-scam-victims-myanmar-china-2024-03-03/) to repatriate nearly a thousand Chinese citizens from Myanmar.

Western countries like the United States, Canada, and the United Kingdom aren’t silent on this issue. They’ve imposed sanctions on individuals and groups involved with these scams. In addition, they’ve worked to eliminate other revenue sources for the Myanmar military, such as oil and gas sectors. U.S. authorities have also seized assets linked to crypto scams.

The U.S. Department of State has investigated human trafficking and cyber scam abuses in Myanmar. Findings from their [Trafficking in Persons report](https://www.state.gov/reports/2023-trafficking-in-persons-report/burma/) could potentially lead to withholding foreign aid from countries complicit in human trafficking.

The fate of scam operations in Myanmar, particularly due to the transnational nature of the problem and the country’s civil unrest, remains uncertain. Experts warn that these illegal operations are highly adaptable and could easily bounce back even amidst crackdowns. With China ramping up its efforts to protect its citizens, there’s a likely chance of these operations finding more victims in western countries.

To counter these threats, Washington is advised to increase its international collaborations, including discussing these issues with China, to protect U.S. citizens from potential scams.

Here are some helpful resources:

– The Center for Preventative Action: Provides updates on Myanmar’s civil war. 
– [United States Institute of Peace report](https://www.usip.org/publications/2024/05/transnational-crime-southeast-asia-growing-threat-global-peace-and-security): Offers an in-depth analysis of global cyber scam networks and policy suggestions to combat their effects.
– [U.S. Department of State report](https://www.state.gov/reports/2023-trafficking-in-persons-report/burma/): Details Myanmar’s shortcomings in addressing human trafficking and offers policy recommendations.
– [Reuters original investigative report](https://www.reuters.com/investigates/special-report/fintech-crypto-fraud-thailand/): Exposes the connection between cyber scams and influential Chinese and Thai trade group representatives.

Thanks to Will Merrow for creating the article’s map.

## **Frequently Asked Questions**
### **How is China addressing its scam problem?**
China is combating its scam problem by implementing a crackdown initiative, leading to the repatriation of more than 40,000 citizens involved in scams or victims of such.

### **What is the response of international governments to these scams?**
Several international governments, including those of the U.S., Canada, and the U.K., have imposed sanctions against individuals and entities linked to these scams. They have also worked to cut other revenue sources for the Myanmar military.

### **What might be the future of scam operations in Myanmar?**
The future of scam operations in Myanmar remains uncertain, mainly due to the transnational nature of the scams and the country’s ongoing civil war. However, experts warn that these operations are highly adaptable and could easily regroup amidst crackdowns.