Key Highlights:
- U.S. sanctioned Burma’s KNA for crypto fraud and trafficking operations.
- KNA-backed scam centers used trafficked workers in cyber fraud schemes.
- Southeast Asia-linked crypto scams caused $5.5B in U.S. losses since 2022.
The U.S. Treasury has sanctioned the Karen National Army (KNA), a militia group in Burma. It has been designated as a transnational criminal organization. The sanctions target its role in orchestrating large-scale cyber scams.
Saw Chit Thu, along with his two sons, leads the group involved in criminal activities. They have been implicated in virtual currency fraud, human trafficking, and cross-border smuggling.
Authorities estimate that crypto scams in the region have led to massive financial losses. Over two years, American victims have lost more than $5.5 billion to these fraudulent schemes.
These scams originate from KNA-controlled areas near the Thai-Burmese border. They are part of a larger network of Southeast Asian crime syndicates using digital platforms to target victims worldwide.
The U.S. Treasury took action under Executive Orders 13581 and 14014. It targets transnational criminal organizations and actors threatening Burma’s stability.
Karen National Army’s Role in Burma’s Cyber Scam Network
The Karen National Army, formerly the Karen Border Guard Force, rebranded itself in March 2024 amid ongoing scrutiny. Despite the name change, the group has maintained ties with Burma’s military and continued its involvement in organized crime.
Shwe Kokko, located in Karen State, is the headquarters for cyber scam syndicates. These operations take place within repurposed hotels and casinos in the region.
KNA has leased land to crime groups and provided critical infrastructure, including power and security. Scam compounds such as KK Park operate under the militia’s protection, according to survivor reports.
Uniforms of armed guards at these sites reportedly displayed the KNA insignia, confirming the group’s active role. The militia benefits financially by offering logistical support to criminal operators using their territory for fraud and trafficking schemes.
Furthermore, Saw Chit Thu’s leadership has transformed KNA into a central node in Burma’s scam ecosystem.
Under his leadership, the organization has built a lucrative system facilitating crypto scams. These fraudulent operations specifically target global victims, focusing on the United States.
Exploiting Victims Through Deceptive Crypto Schemes
FinCEN and OFAC analysts have identified a surge in crypto fraud tied to scam centers in Southeast Asia. Burma has emerged as a key hotspot for these fraudulent activities.
In September, FinCEN issued an alert highlighting the rise of “pig butchering” scams. These schemes, involving slavery and convertible virtual currencies (CVCs), were already widespread.
Typically, these frauds start as scammers starting personal connections on messaging platforms. Over weeks or months, victims are usually emotionally or financially vulnerable and are convinced to invest in fake crypto platforms.
Sophisticated scripts, fake account dashboards, and staged video calls are used to build credibility. After victims transfer large amounts of money, communication ceases, and the platforms vanish.
Many perpetrators are victims, trafficked and forced into scam operations. They face constant threats of violence from the organization.
Their passports are taken away, leaving them trapped without escape. If they protest, they are confined in detention-like facilities and subjected to abuse.
Surging Losses From Crypto Scams
U.S. authorities estimate that financial losses from these scams reached $2 Billion in 2022. The losses surged to $3.5 Billion in 2023, highlighting their growing impact.
The surge in crypto scams has led to coordinated actions by various U.S. government agencies. FinCEN has issued multiple alerts highlighting the risks. Authorities have also imposed sanctions on individuals linked to similar Southeast Asian operations.
As a result of the latest sanctions, all U.S.-linked assets of the KNA and its leaders are now blocked. U.S. persons and businesses are prohibited from engaging in transactions with the sanctioned individuals or entities.
OFAC noted that entities owned 50 percent or more by these parties are also subject to sanctions. Additionally, U.S. and non-U.S. persons facilitating these transactions could face enforcement measures.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss. That may occur from investing in or trading. Please do your research before making any financial decisions.
