Recent report by the United Nations Office on Drugs and Crime (UNODC) sheds light on the alarming rise of organised crime in Southeast Asia. The report, titled “Transnational organised crime and the convergence of cyber-enabled fraud, underground banking, and technological innovation,” reveals how these criminal organisations are leveraging technology, particularly cryptocurrency, to engage in illicit activities with minimal accountability.

Overview of UN report

The organised crime scene in Southeast Asia has transformed drastically over the last decade. Traditionally centred on drug trafficking, criminal syndicates have expanded into cyber-enabled fraud, human trafficking, and money laundering. Technological advancements have played a pivotal role in the expansion of transnational crime. The rise of the internet, social media, and blockchain technology has provided criminal organisations with new tools to operate more efficiently.

The UNODC report highlights the sophistication of these operations, estimating that cyber-enabled fraud caused financial losses between $18 billion and $37 billion in East and Southeast Asia alone in 2023. The UNODC report stresses the need for governments to strengthen their financial regulatory frameworks to combat this growing threat.

The report explained that these groups are leveraging existing underground banking systems, including poorly regulated casinos, junkets, and illegal online gambling platforms that use cryptocurrency. The rise of high-risk virtual asset service providers (VASPs) in Southeast Asia has provided a new means for these activities, allowing criminal industries to operate without accountability.

Masood Karimipour, the UNODC regional representative for Southeast Asia and the Pacific, stated in prepared remarks that organised crime groups are converging and exploiting vulnerabilities, with the situation evolving faster than governments can manage.

Mr Karimipour said, “Criminal groups were producing larger scale and harder to detect fraud, money laundering, underground banking and online scams. This has led to the creation of a criminal service economy, and the region has now emerged as a key testing ground for transnational criminal networks looking to expand their influence and diversify into new business lines.”

Economic impact

Cyber-enabled fraud has had a devastating economic impact on Southeast Asia. With losses estimated between $18 billion and $37 billion in 2023, the region is facing a growing financial crisis due to the sheer scale of these crimes. The anonymous and borderless nature of cyber fraud makes it particularly difficult to combat, leading to a significant drain on both public and private resources.

The UNODC has voiced serious concerns about the growing influence of transnational crime groups in Southeast Asia. The agency has called for increased international cooperation, stronger regulatory frameworks, and greater investment in law enforcement capabilities.

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