The US has imposed sanctions on Cambodian crime syndicates using forced labour operations to run crypto scams that have cost victims billions.

The sanctions are aimed at disrupting both human trafficking and fraudulent investment schemes. The Department of Justice cited widespread corruption and exploitation of trafficked individuals forced to carry out online crypto scams under harsh conditions.

The Cambodian groups perpetrated crypto investment frauds that contributed to a 53% rise in crypto-related investment losses in 2023, reaching nearly $4 billion, according to the FBI’s Internet Crime Complaint Center.

This follows a steady rise in crypto investment fraud, with losses growing from $1.56 billion in 2021 to $2.57 billion in 2022. When taking the latest figures into account, the total increase from 2021 to 2023 represents a staggering 154% surge.

Without stronger enforcement from government agencies, the upward trajectory is unlikely to reverse on its own.

Erin West, a Santa Clara prosecutor, is stepping up to confront this growing crisis. As a key figure in the fight against crypto scammers, West has highlighted the vast scale of the problem. “I talk to victims all day, every day — it’s a firehose of people,” she said, noting the vast number of cases she handles.

The challenge of combating the scams lies in their international nature, as victims are often defrauded by syndicates operating out of countries including Cambodia, Laos, and Myanmar.

Workers, lured by promises of legitimate jobs, are trafficked and forced into slave-like conditions where they must carry out crypto scams. “There’s only one group that’s winning, and that’s an international organised crime syndicate,” West said.

The crimes have not only drained billions from unsuspecting victims, but also highlight the human cost, as trafficked individuals are coerced into the operations.

West added that there is a stigma surrounding victims of crypto scams that makes reporting difficult. “It’s a speed game,” she explained. “The sooner victims report, the more likely we are to recover their money.”