Interpol has classified pig-butchering scams as a global threat: $11 billion in Crypto Assets Money Laundering chain has come to light.

The International Criminal Police Organization officially passed a resolution at its plenary session in Marrakech, classifying the criminal composite networks involving Crypto Assets fraud as a transnational threat. These networks have affected victims in over 60 countries through human trafficking, forced labor, and large-scale online fraud activities. It has been disclosed that the online marketplace operated by the Huibang Group in Phnom Penh, Cambodia, processed over $11 billion in Crypto Assets transactions related to the fraud composite networks, and the U.S. Department of the Treasury has taken action to sever its ties with the global financial system.

Operation Models of Criminal Networks and Global Diffusion Pathways

The criminal syndicate revealed by Interpol operates in a highly organized manner, often luring victims with high-paying overseas jobs, and then trafficking them to specific zones where they are forced to engage in illegal activities such as voice phishing, pig butchering, investment fraud, and Crypto Assets scams. These criminal groups utilize advanced technology to deceive victims and cover up their operational traces, demonstrating the “highly adaptive” characteristics of transnational crime.

This crime pattern initially drew international attention in Southeast Asia, with multiple zones in Myanmar, Cambodia, and Laos recorded as hotspots for large-scale human trafficking and forced online scams. According to a separate report from Interpol, since January 2023, the victims of human trafficking mainly come from this region as well as China and India, and by May of the same year, it had spread to parts of Russia, parts of Colombia, coastal countries in East Africa, and certain areas in the United Kingdom.

The global diffusion path of criminal networks reflects their ability to exploit the differences in judicial jurisdictions across countries. Criminal organizations specifically choose to establish operational bases in regions with weak law enforcement cooperation, poor economic conditions, or inadequate regulatory frameworks, continuously conducting criminal activities by exploiting cross-border regulatory gaps. This strategy makes it difficult for law enforcement actions in a single country to completely dismantle the entire network, highlighting the urgent need for international coordination in response.

Key Data and Impact Scope of Pig Butchering Scam Network

Crime Scale

• Transaction amount involved: Huiwang Group processed 11 billion USD Crypto Assets transactions.
• The U.S. Treasury confirms: $4 billion money laundering activities related to fraud parks.
• Affected countries: over 60 countries

Geographical Distribution

• Origin Region: Southeast Asia (Myanmar, Cambodia, Laos)
• Victim sources: Southeast Asia, China, India
• Diffusion Areas: Russia, Colombia, East Africa, United Kingdom

Technical Features

• Fund Transfer: Stablecoin, Low Fee Chain, Fast Cross-Chain Exchange
• Money Laundering Network: China's money laundering network, over-the-counter brokers, informal cash-out infrastructure
• Covert methods: Advanced technology deceives victims and conceals operational traces.

The Role Evolution of Crypto Assets in Money Laundering Chains

Ari Redbord, Global Policy Director at blockchain intelligence company TRM Labs, pointed out that the flow of funds related to pig butchering scams has undergone significant changes. A few years ago, the associated funds primarily flowed through mainstream exchanges following relatively predictable paths, whereas now they rely more on stablecoins, low-fee blockchains, and fast cross-chain swaps to disperse fund flows and buy time. This shift makes tracking funds more difficult and poses new challenges for law enforcement agencies.

Criminal networks have also intensified their use of Chinese money laundering networks, over-the-counter brokers, and informal cash-out infrastructure, which help operators transfer funds beyond the control of traditional finance. Redbord emphasized that this evolution is a direct response by criminal organizations to increased law enforcement pressure, while also reflecting the complexity and global nature of the Crypto Assets ecosystem.

From a technical perspective, the widespread use of stablecoins provides criminal organizations with a more stable value transfer tool, avoiding the risks associated with price fluctuations of other Crypto Assets. Low-fee blockchains enable criminal organizations to transfer large amounts of funds at a lower cost, while cross-chain exchange technology further increases the concealment of fund flows. The combination of these technological features makes modern money laundering activities more difficult to trace and disrupt than traditional financial crimes.

Global Law Enforcement Cooperation and Technological Countermeasures Upgrade

The resolution of Interpol is an important component of global law enforcement coordination enhancement. The United States has recently established a dedicated task force, and partners in Asia and Europe are increasingly aligning in identifying the types of crimes related to trafficking-driven scam zones. Redbord believes that although these criminal networks “thrive in cross-border gaps,” these gaps are “narrowing,” and the “windows of opportunity” that did not exist a few years ago are now starting to emerge.

The advancement of asset tracking technology provides strong support for law enforcement cooperation. Coordinated asset tracking is not only “feasible” but also “truly effective” when jurisdictions act together. Redbord emphasized, “When coordination is in place, you can actually cut off the exits that these networks rely on.” The effectiveness of this international cooperation has been validated in multiple cases, including the U.S. Treasury's sanctions against the Xunying Group.

From a technical confrontation perspective, the maturity of blockchain analysis tools enables law enforcement agencies to track the flow of Crypto Assets more effectively. Several blockchain intelligence companies have developed identification systems specifically targeting pig-butchering crime patterns, helping law enforcement identify key nodes and capital flows of criminal networks by analyzing on-chain transaction patterns, address associations, and behavioral characteristics. This technological advantage is gradually offsetting the attempts of criminal organizations to exploit the anonymity features of Crypto Assets.

The Dual Challenge of Industry Self-Regulation and Regulatory Response

The Crypto Assets industry is strengthening self-regulatory measures in the face of the threat posed by pig-butchering scams. Major exchanges have enhanced customer due diligence and transaction monitoring, particularly for transactions related to known high-risk jurisdictions. Many platforms have implemented stricter identity verification requirements and transaction limits, maintaining a high level of vigilance against unusual activity patterns. While these measures have increased compliance costs, they are crucial for maintaining the industry's reputation and long-term development.

Regulatory authorities are also actively adjusting policy frameworks. The U.S. Treasury's sanctions against Huayi Group indicate that regulators are beginning to more actively use existing powers to address illegal financial activities related to Crypto Assets. Meanwhile, regulatory agencies from multiple countries are negotiating to establish more unified international standards to reduce opportunities for regulatory arbitrage and prevent criminal organizations from exploiting regulatory differences to choose their bases of operation.

From a technical standards perspective, regulatory agencies are beginning to pay attention to the anti-money laundering capabilities at the blockchain protocol level. Some jurisdictions are considering imposing certain responsibilities on blockchain protocol developers, requiring them to take compliance needs into account in the design of their protocols. At the same time, discussions about the regulation of stablecoin issuers are becoming more active, particularly regarding the requirements for the transparency of their reserve assets and their transaction monitoring capabilities, which may be further elevated.

The Evolution of Crime and the New Frontiers of Global Governance

The resolution by Interpol to elevate pig-butchering crime networks to a global threat marks that Crypto Assets-related crimes have entered the highest priority area for transnational law enforcement cooperation. Criminal organizations are using blockchain technology to evade regulation, which is fostering closer international cooperation and more advanced countermeasures. In this ongoing escalating battle, the compliance practices of the Crypto Assets industry and the positive incentives of regulatory policies will play a crucial role. For ordinary users, the implementation of this resolution means a safer trading environment; for law enforcement agencies, it signifies a significant enhancement in the ability to track and block the flow of criminal funds. With the strengthening of the global cooperation network and the improvement of technical tools, the days when criminal organizations can operate freely using Crypto Assets are coming to an end, which is a necessary prerequisite for building a trustworthy digital asset ecosystem.