The Financial Action Task Force (FATF) said in a report published today that virtual assets are now a core channel for laundering the proceeds of scam compounds in Southeast Asia. The intergovernmental watchdog urged governments to fight scam and fraudulent activity by targeting the criminal networks operating behind the compounds, rather than addressing individual scams in isolation.

How scam compounds move dirty money through crypto

The FATF, a Paris-based body that writes the world's anti-money-laundering rules, examined in its new report how scam money is generated and laundered.

According to the findings, time is the biggest problem for victims. Stolen funds can leave an account and reach an exit point in as little as two to five minutes, while victims on average take about 20 hours to notice the theft. Fast payment systems have helped criminals move money at this speed as well.

The report describes a laundering process split into seven stages, beginning with social media. Fraudsters use messaging apps and social accounts to set up operations, hire workers, and find victims, before carrying out the scam during what the report calls the "payment window."

Stablecoins now dominate illicit blockchain flows

Ahead of the report, the FATF released its seventh update on virtual assets, which found that most illegal activity tracked on blockchains now moves through stablecoins — tokens designed to hold a steady value, typically pegged to fiat currencies such as the US dollar.

The update highlighted Cambodia-based Huione Group, which laundered at least $4 billion between 2021 and 2025 on behalf of both fraud schemes and North Korean cyber theft. The group's platform has been described as the largest illegal online marketplace ever recorded, with linked wallets receiving at least $24 billion. Figures like these are traceable because blockchain transfers are permanently recorded on open ledgers, allowing analytics firms such as Elliptic to follow and tally flows across linked wallets.

In 2025, the US Treasury's Financial Crimes Enforcement Network (FinCEN) moved to cut Huione off from the American financial system, a step aimed at severing an entire network's access to US banks and payment providers rather than pursuing individual transactions. It flagged the group's "unfreezable" USDH stablecoin, which was built to avoid the freeze tools that most issuers maintain.

What the FATF recommends

The task force recommended that countries disrupt illegal money flows from start to finish. It also called for information sharing among banks, telecommunications companies, and technology firms, and urged authorities to act within the first 24 to 72 hours after a scam is detected, when funds can still be frozen — a narrow window given the two-to-five-minute exits documented in the report.

FATF President Giles Thomson said criminals are now "weaponising AI and other technologies" to run their scam operations, meaning governments and authorities need to "urgently modernise and accelerate our response."

As the standard-setter for global anti-money-laundering rules, the FATF does not itself enforce them; turning these recommendations into practice falls to national regulators and law enforcement agencies across its member jurisdictions.

The report notes that people from at least 80 jurisdictions have been traced to scam compounds in Southeast Asia, many of them trafficking victims. An estimated 120,000 people are forced to run online scams in Myanmar alone.