Interpol declares cryptocurrency scam networks a global threat

Source: PortaldoBitcoin Original Title: Interpol declares cryptocurrency scam networks a global threat Original Link: Interpol has formally recognized that cryptocurrency-related fraud is now at the center of an extensive scam industry in residential complexes, designating the network as a transnational criminal threat, as global law enforcement agencies mobilize to enhance coordination around its financial flows.

The member countries of the International Criminal Police Organization approved a resolution on the subject at their General Assembly in Marrakech this week. The organization stated that the networks rely on human trafficking, online fraud, and forced labor, and now affect victims in more than sixty countries.

“Often under the guise of lucrative jobs abroad, victims are trafficked into residential complexes where they are forced to carry out illicit schemes, such as voice phishing, romance scams, investment fraud, and cryptocurrency scams, targeting individuals around the world,” the organization said.

The resolution describes criminal groups recruiting victims with fake job offers and transporting them to residential complexes where they are forced to carry out investment schemes, romance scams, and cryptocurrency fraud, among other illegal or criminal activities.

Interpol stated that the groups operating these scam centers use advanced technologies “to deceive victims and mask their operations,” with transnational criminal networks operating with a “highly adaptable nature.”

The model of the scam center initially attracted international attention in Southeast Asia, where complexes in Myanmar, Cambodia, and Laos were documented as locations for large-scale human trafficking and coercive online fraud.

The victims of human trafficking related to the scams were from the region, as well as from China and India, starting in January 2023.

In May of the same year, the scheme had already spread to certain regions of Russia, parts of Colombia, coastal countries in East Africa, as well as parts of the United Kingdom.

Pig slaughtering operations

The ties of the criminal network to cryptocurrencies were revealed for the first time in July of last year, when it was discovered that an online marketplace operated by the Huione Group had processed over $11 billion in cryptocurrency transactions linked to the operators of the fraudulent schemes.

In May of this year, the U.S. Department of the Treasury took measures to isolate the group from the American financial system, after alleging over $4 billion in money laundering activities linked to fraudulent operations in pig complexes.

“A few years ago, the flows of money from pig slaughter operations followed relatively predictable paths through the major exchanges. Today, they rely much more on stablecoins, low-cost blockchains, and quick swaps between blockchains to fragment the movement and buy time,” said Ari Redbord, former Treasury Department official and current global head of policy at blockchain intelligence firm TRM Labs.

TRM Labs also noted “an increased use of Chinese money laundering networks, OTC brokers, and informal withdrawal infrastructure — all of which help operators move value out of the reach of traditional financial controls,” Redbord added.

“But the story is not one-sided: as police attention has intensified, fraudulent networks have changed the way they move money, and defenders have also become more agile,” he stated. “This global coordination is the real change.”

Interpol's resolution is “part of a broader international shift,” Redbord added. With the recent launch of a task force by the U.S., “partners in Asia and Europe” are now “increasingly aligned on typologies related to fraudulent schemes linked to human trafficking.”

Although these networks “thrive in areas with cross-border gaps”, these gaps are now “narrowing”, so that “action windows that simply did not exist a few years ago” can now be identified, he added.

The coordinated tracking of assets to locate lost funds is not “just feasible,” said Redbord, stating that the process “works when jurisdictions act together.”

“When coordination works, it is really possible to cut off the escape routes that these networks rely on,” he added.