The phenomenon of “pig-butchering” scams has emerged as a significant cybercrime, exploiting vulnerabilities intensified by the Covid-19 pandemic. These schemes involve creating fraudulent investment platforms and manipulating victims emotionally, often targeting them through social media. Shockingly, these operations are frequently linked to human trafficking networks across Southeast Asia.
Central to these allegations is Wan Kuok-koi, also known as “Broken Tooth,” a former Macau gangster. According to The Wall Street Journal, Wan is believed to be a key figure behind these scams. Despite his alleged connections to organized crime, Wan remains at large, shedding light on the failures of international enforcement efforts.
Named for the analogy of “fattening” victims with trust before “butchering” them financially, pig-butchering scams typically involve scammers posing as friends or romantic partners online. Once trust is established, victims are persuaded to invest in fake cryptocurrency platforms, often losing vast sums of money.
One striking example involved a Kansas banker who embezzled $547.1 million from his own bank to cover his losses. A study by finance professor John Griffin found that criminal networks moved over $75 billion through cryptocurrency exchanges in just four years, with Tether being the most commonly used stablecoin.
“These are large criminal organized networks, and they’re operating largely unscathed,” Griffin stated.
Wan Kuok-koi, infamous for his leadership of Macau’s 14K Triad in the 1990s, served 14 years in prison for organized crime. After his release, he resurfaced as a businessman. In 2018, he established the Hongmen Association in Cambodia, which purported to be a cultural organization but has been linked to cybercrime operations.
The group's activities expanded into Myanmar with the establishment of the Dongmei Zone, described by investigators as one of the first scam compounds. At a 2020 ribbon-cutting ceremony, Wan appeared alongside militia members, solidifying the zone’s association with illicit activities. The U.S. Treasury has since sanctioned the Dongmei Zone for its role in human trafficking and cyber scams.
Thousands of individuals have been trafficked into scam compounds like Dongmei under false promises of legitimate work. Victims are forced to surrender their passports and engage in fraudulent activities under constant surveillance.
Lu Yihao, a Chinese man enslaved for seven months in Dongmei, said: “As far as I could tell, from my personal experience, Dongmei was specifically built for criminal purposes.” The United Nations estimates that over 200,000 people are trapped in such conditions across Southeast Asia.
Efforts to combat pig-butchering scams are hindered by the role of cryptocurrencies, which facilitate laundering and obfuscation of funds. Platforms like Tokenlon have been identified as tools for scam proceeds, while Binance has worked with authorities to freeze fraudulent accounts.
Jan Santiago, a consultant for Chainbrium, explained: “People in the U.S., their money is going straight to Southeast Asia, into this underground economy.”
The Covid-19 pandemic provided fertile ground for these scams, as isolation left many more susceptible to emotional manipulation. Victims have lost not only their savings but also their trust.
A recent study titled How Do Crypto Flows Finance Slavery? The Economics of Pig Butchering emphasized the global scale of these operations. Paolo Ardoino, Tether’s CEO, stated: “With Tether, every action is online, every action is traceable, every asset can be seized, and every criminal can be caught,” though critics argue that cryptocurrencies remain attractive for illicit activities.
Wan has denied any involvement in criminal operations. In a 2020 video, he claimed that his Hongmen Association “follows the law.” However, his continued appearances at Hongmen events, including the recent opening of a Macau office, raise questions. Investigators remain unable to locate him.
Pig-butchering scams have expanded significantly, exploiting the perfect storm of the pandemic and the complexities of cryptocurrency tracking. Authorities face ongoing challenges in dismantling these sprawling networks.
