UN Exposes Links Between Crypto, and Organized Crime in East and Southeast Asia

Bits Logics Team . 15th Jan 2024
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  • A UN report reveals money laundering thrives in East and Southeast Asia, fueled by illegal online casinos and crypto.
  • The surge of underregulated online gambling platforms and crypto exchanges enables major organized crime groups to move and launder vast sums.
  • The UNODC issues a stark warning urging urgent collaborative action to prevent further proliferation.

In a groundbreaking report released today, the United Nations Office on Drugs and Crime (UNODC) sheds light on the escalating threat posed by the symbiotic relationship between casinos, cryptocurrency, and transnational organized crime in East and Southeast Asia.

 Titled ‘Casinos, Money Laundering, Underground Banking, and Transnational Organized Crime in East and Southeast Asia: A Hidden, Accelerating Threat,’ the study reveals a concerning nexus between illegal online casinos, e-junkets, and cryptocurrency exchanges.

The report underscores that while casinos and high-cash-volume businesses have long been conduits for underground banking and money laundering, the recent proliferation of underregulated online gambling platforms and crypto exchanges has dramatically altered the landscape. 

According to Jeremy Douglas, UNODC Regional Representative for Southeast Asia and the Pacific, this expansion of the illicit economy has prompted a technological revolution in underground banking, facilitating faster anonymized transactions, commingling of funds, and new opportunities for organized crime.

The study cites numerous cases illustrating how major organized crime groups utilize online casinos and related businesses to launder massive volumes of both state-backed fiat currencies and cryptocurrencies. 

This has effectively created channels for integrating billions of criminal proceeds into the financial system, contributing to the expansion of the region’s broader illicit economy. Additionally, the report highlights the diversification of illegal online casino operators into cyberfraud and cryptocurrency laundering, with evidence of organized crime influence within casino compounds and border areas.

The UNODC analysis estimates that there were over 340 licensed and unlicensed land-based casinos operating in Southeast Asia as of early 2022, with most transitioning to online platforms. The formal online gambling market is projected to surpass US $205 billion by 2030, with the Asia Pacific region representing the largest share of growth between 2022 to 2026. The report outlines various policy developments and enforcement measures implemented by governments to tackle illegal casino-based capital outflows, corruption, and money laundering.

The technical policy brief, developed over more than a year, provides an in-depth examination of criminal indictments, case records, court filings, and other data collected in consultation with authorities and partners. It includes recommendations aimed at strengthening knowledge and awareness, legislation, policy, and enforcement responses in the region to address the situation.