Underground Crypto Trading in Cambodia: Scams, Laundering, and the Ban

You might think a total government ban would kill a market. In Cambodia, it did the opposite. It pushed underground crypto trading into the shadows, where it merged with human trafficking and transnational crime. Today, this isn't just about people buying Bitcoin on their phones. It’s about billions of dollars moving through a network of "scam compounds" that look like hotels but function like prisons.

If you are tracking digital assets or following Southeast Asian finance, you need to understand how Cambodia became a global hub for illicit crypto flows. The story involves a specific group called the Prince Group, a platform named Huione Guarantee, and a regulatory shift that happened too late to stop the damage. Here is what is actually happening on the ground.

The Ban That Backfired

In 2019, the National Bank of Cambodia (NBC) issued Directive No. 1125. This order banned all cryptocurrency transactions. On paper, this should have wiped out the local crypto scene. But Cambodia has always been a cash-heavy society with limited access to formal banking for many citizens. When you ban a service people want, they don’t stop using it; they just move it off the books.

Instead of disappearing, crypto adoption persisted. Reports from Standard Insights in 2025 show that roughly 10.63% of Cambodians still used cryptocurrency despite the prohibition. Who was facilitating this? Not licensed banks. It was an informal network of exchange houses and online platforms operating in a legal gray zone. This vacuum allowed criminal organizations to step in and offer liquidity when legitimate channels were closed.

Huione Guarantee: The One-Stop Crime Platform

At the center of this underground economy sits Huione Guarantee, also known as Huiwang Group. Founded in 2014, Huione started as a payment gateway but evolved into something far more complex. Elliptic, a blockchain analytics firm, described it as a "one-stop crime platform." Think of it as an app store for criminals. If you ran a scam ring in Southeast Asia, you didn’t just need a place to swap USDT for Khmer Riel. You needed tools.

Huione offered technology stacks, personal information databases, and money laundering services. For a time, it operated openly on Telegram, allowing vendors to sell everything from fake IDs to bulk accounts. When Telegram blocked the main channel in May 2025 due to compliance pressure, the operations didn’t die. They went deeper underground, using encrypted channels and private servers. Between August 2021 and January 2025, Chainalysis estimated that Huione laundered at least $4 billion. That includes $37 million linked to North Korean cyber thefts and nearly $300 million from other cybercrime activities.

The Prince Group and Scam Compounds

You cannot talk about Cambodian crypto without talking about the Prince Group. Led by Chen Zhi, this conglomerate grew into one of Asia’s largest transnational criminal organizations. While they own hotels and casinos, their real engine was a network of at least ten "scam compounds" across Cambodia. Places like the Jinbei Compound in Sihanoukville and Golden Fortune Science and Technology in Chrey Thom weren’t just offices. They were fortified camps.

Victims trafficked from China, Malaysia, and even Africa were lured with promises of high-paying jobs. Once inside, passports were confiscated. Workers were forced to run "pig butchering" scams-romance or investment fraud schemes targeting Westerners. If you failed your daily quota, you faced physical punishment. The profits from these scams, mostly paid in stablecoins like USDT, flowed directly back into the Prince Group’s ecosystem. A former worker told PANE News Lab he worked 18-hour days under threat of violence, executing crypto investment frauds that netted millions while he earned nothing.

How the Money Moves

Laundering crypto in Cambodia isn’t simple. It requires layers. First, victims wire fiat currency or send crypto to a wallet controlled by a scam compound. Then, the funds are moved through Huione or similar OTC (over-the-counter) desks. These desks convert digital assets into local currency or other cryptocurrencies, breaking the transaction trail.

Data from South Korea’s Financial Supervisory Service shows the scale. Transfers between five major Korean exchanges and Huione Guarantee jumped from 9.22 million won in early 2023 to 12.8 billion won ($8.9 million USD) in 2024. That is a 1,400-fold increase. By October 2025, despite scrutiny, transactions hit 3.15 billion Korean Won. Why Korea? Many scammers target East Asian markets, and South Korean exchanges provide the necessary volume and liquidity to wash the money clean before it enters the global financial system.

Regulatory Whiplash: From Ban to License

For years, the NBC stuck to its 2019 ban. But the economic reality was undeniable. Crypto was everywhere, especially among younger demographics and those dealing with cross-border remittances. In late 2024, the regulator introduced Prakas B7-024-735 Prokor. This shifted the model from a blanket ban to a permission-based licensing system.

The goal was to bring the market into the light. Banks could now handle some crypto-related activities if they followed strict Anti-Money Laundering (AML) rules. However, critics argue this move inadvertently helped the bad guys. Sophisticated networks like the Prince Group already had the resources to navigate partial regulations. They could register certain entities while keeping the dirty work in unlicensed subsidiaries. The new rules created a veneer of legitimacy for operations that were still deeply entangled with criminal proceeds.

International Crackdowns and Seizures

Cambodia’s underground market doesn’t exist in a bubble. It serves victims in the US, Europe, and Australia. In October 2025, the U.S. Department of Justice filed a civil complaint against Prince Group assets. Simultaneously, a coordinated action with the UK resulted in the seizure of approximately $15 billion in Bitcoin. According to TRM Labs, this was the largest forfeiture in U.S. history.

This wasn’t just symbolic. The DOJ complaint detailed how Prince Group used "illegal banks and underground money houses" to integrate illicit crypto flows with legitimate casino revenue. Documents mentioned terms like "BTC laundering" explicitly. The U.S. Treasury’s FinCEN also targeted Huione, alleging it processed billions in illicit funds. These actions signal that the era of impunity for Cambodian crypto barons is ending, though enforcement remains challenging.

What This Means for Investors and Travelers

If you are investing in crypto projects based in Southeast Asia, be wary of Cambodian entities with opaque ownership structures. The line between a tech startup and a front for a scam compound can be blurry. Look for clear AML policies and verifiable licenses under the new 2024 framework.

For travelers, the risk is different. You might encounter informal exchange rates that seem too good to be true. Often, they are. Using unregulated OTC desks carries the risk of holding tainted funds that could get frozen later. Stick to established international exchanges or regulated local providers if available. Remember, just because a platform looks professional-mimicking interfaces like Binance or KuCoin-doesn’t mean it is safe.

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