Imagine a place where the government bans cryptocurrency, yet billions of dollars flow through it every year. That is exactly what happened in Cambodia. While the National Bank of Cambodia officially prohibited all crypto transactions back in 2019, a massive underground economy thrived right under their noses. This wasn't just a few guys trading Bitcoin on their phones. It was a sophisticated criminal ecosystem involving human trafficking, violent forced labor, and complex money laundering operations that rivaled the global drug trade.
If you are wondering how this became possible, or perhaps worried about whether your investments are safe from these networks, you need to understand the mechanics behind this hidden world. The story of underground crypto trading in Cambodia is not just about finance; it is a tale of international crime syndicates exploiting regulatory gaps.
Why did underground crypto trading flourish in Cambodia despite a ban?
The National Bank of Cambodia issued Directive No. 1125 in 2019, banning all cryptocurrency transactions. However, this created a legal vacuum rather than stopping activity. With weak financial regulation and a cash-based economy, transnational criminal organizations stepped in. They built infrastructure like scam compounds and used platforms like Telegram to facilitate illegal trades, effectively creating a parallel market that operated outside state control.
Who are the key players in Cambodia's underground crypto market?
Two major entities dominated this space: the Prince Group and Huione Guarantee (Huiwang Group). The Prince Group operated physical scam compounds, such as the Jinbei Compound in Sihanoukville, where trafficked workers were forced to run investment fraud schemes. Huione Guarantee acted as a 'one-stop crime platform,' providing technology tools and money laundering services for cybercriminals across Southeast Asia.
How much money was laundered through these networks?
According to Chainalysis, Huione Guarantee alone laundered at least $4 billion between August 2021 and January 2025. This included funds from North Korea-linked cyber thefts ($37 million), virtual currency investment scams ($36 million), and other cybercrime activities (~$300 million). Additionally, the U.S. Department of Justice seized approximately $15 billion in bitcoin linked to these networks in late 2025, marking the largest forfeiture in U.S. history.
What role did scam compounds play in this ecosystem?
Scam compounds, like those run by the Prince Group, functioned as violent forced labor camps. Victims were trafficked into Cambodia under false job promises and forced to work 18-hour days perpetrating cryptocurrency investment fraud. These facilities processed funds from multiple criminal streams, including illegal gambling and ransom payments, integrating illicit crypto flows with seemingly legitimate businesses like hotels and casinos.
How has the regulatory landscape changed recently?
In late 2024, the National Bank of Cambodia shifted from a blanket ban to a permission-based licensing system via Prakas B7-024-735 Prokor. While intended to legitimize the market, this change inadvertently provided new opportunities for sophisticated money launderers to operate under partial regulatory cover. Despite enforcement actions, transaction volumes with entities like Huione continued to grow into 2025, showing the resilience of these networks.
Are regular investors at risk from these Cambodian networks?
Yes, indirectly. Many victims lost between $5,000 and $250,000 after being lured by scammers claiming high returns on crypto investments. These scammers often used professional-looking platforms mimicking legitimate exchanges like Binance and Kucoin. The 'Brooklyn Network' alone moved over $18 million from U.S. victims to Prince Group accounts between 2021 and 2022, demonstrating the global reach of these fraud schemes.
What technical methods did these groups use to evade detection?
These networks used multi-layered laundering techniques, moving funds across five major Korean cryptocurrency exchanges. When suspicious activity was detected, they would suspend trading on one exchange and move to another. They also utilized Telegram-based infrastructure for coordination before being blocked in May 2025, forcing them into more encrypted channels. Internal documents revealed discussions about using 'illegal banks and underground money houses' to further obscure fund trails.
How does Cambodia's situation compare to its neighbors?
Unlike Vietnam, which permits licensed exchanges with strict AML compliance, or Thailand, which requires SEC licenses, Cambodia's market was uniquely characterized by physical integration with human trafficking. While neighboring countries focused on regulating digital assets, Cambodia's underground market was tied directly to violent crime syndicates operating out of casino-hotel complexes, making it distinct in both scale and brutality.
What is the future outlook for crypto in Cambodia?
The future is uncertain but trending toward stricter international scrutiny. The $15 billion bitcoin seizure in late 2025 signals increased pressure. However, experts warn that without sustained multinational enforcement, these operations will continue to evolve. The National Bank of Cambodia is exploring a Central Bank Digital Currency (CBDC) as a legitimate alternative, but this transition may take years given the current regulatory infrastructure.
I'm a blockchain analyst and crypto educator who builds research-backed content for traders and newcomers. I publish deep dives on emerging coins, dissect exchange mechanics, and curate legitimate airdrop opportunities. Previously I led token economics at a fintech startup and now consult for Web3 projects. I turn complex on-chain data into clear, actionable insights.