UNODC Urges Southeast Asia to Combat Evolving Cyber Fraud Tactics Amid Rising Use of AI by Scammers

The UNODC has shared important recommendations to tackle cyber fraud in Southeast Asia. They’re highlighting how scammers are changing their game, now using advanced technologies like AI.

The United Nations Office on Drugs and Crime is urging Southeast Asian countries to make it illegal to operate unlicensed money service businesses or virtual asset service providers (VASPs).

According to a report released on Monday, some VASPs, including those tied to known criminals, are helping fraudsters and high-risk gambling sites. One unnamed entity reportedly conducted transactions worth “hundreds of millions of dollars” with criminal groups. These groups are involved in serious crimes, like drug trafficking, human trafficking, cybercrime, and distributing child sexual abuse material. Some are even sanctioned by the U.S. Office of Foreign Assets Control (OFAC) and linked to North Korea’s Lazarus Group.

Masood Karimipour, the UNODC's regional representative, stated, “It’s more critical than ever for governments to recognize the severity and reach of this global threat and to focus on solutions that address the rapidly evolving criminal landscape in the region.”

The agency also recommended better monitoring of organized crime in casinos, junkets, and cyber fraud operations. They emphasized the need for improved training for authorities on online gambling and money laundering methods, especially those involving cryptocurrencies.

Not all scams from the region involve crypto, but it’s a popular choice for scammers. Why? It allows for quick cross-border transactions, and there’s a lot of misinformation out there. Many people don’t fully understand how cryptocurrency works. Plus, cross-border law enforcement cooperation can be weak, complicating investigations and asset recovery.

Online fraud has exploded into a major industry in the region, often operating from unassuming office buildings or casino complexes. Interestingly, both scammers and victims often come from other places. A previous UN report estimated that around 220,000 people work in scam centers in Cambodia and Myanmar, with some lured there under false pretenses of legitimate jobs.

One common scam is called “pig butchering.” In this romance scam, operators befriend unsuspecting victims online and then persuade them to invest in fake platforms.

The report found that scammers are diversifying their tactics. They’re using impersonation scams, job scams, asset-recovery scams, and targeted phishing scams. There’s also a rise in using new tech like AI and deep fakes to run their operations.