U.S. Charges Cambodian Tycoon Ly Yong Phat in Massive Cryptocurrency Scam Linked to Human Trafficking
October 16, 2025 — The U.S. Department of the Treasury has sanctioned prominent Cambodian businessman and Senator Ly Yong Phat, along with his associated enterprises, for alleged involvement in a large-scale cryptocurrency scam that is intertwined with human trafficking and forced labor.
The announcement by the Treasury’s Office of Foreign Assets Control (OFAC) on Thursday details extensive investigations into Ly Yong Phat’s businesses, particularly the O-Smach Resort, exposing their role in orchestrating systemic human rights abuses including trafficking victims for crypto-related fraudulent schemes.
Allegations and Investigations
The investigations, ongoing for over two years, revealed that vulnerable individuals from countries such as China, India, Indonesia, Malaysia, and Singapore were lured to Cambodia under false pretenses of employment. Upon arrival at the O-Smach Resort, victims reportedly had their passports and phones confiscated, then were coerced into operating fraudulent cryptocurrency and investment scams.
Victims were forced to participate in the so-called “pig butchering” scams, a method where they build seemingly genuine relationships with targets to persuade them to invest large sums of money in cryptocurrency or foreign exchange schemes, ultimately defrauding the victims out of their funds.
Efforts to resist or escape were reportedly met with brutal retaliation, including physical beating and electric shocks. Cambodian local authorities undertook several rescue missions between October 2022 and March 2024, successfully freeing more than 250 Indian nationals and numerous others who had been trapped in this exploitative network. BBC and various international outlets documented these rescues, highlighting the plight of individuals held against their will and forced into criminal activity.
U.S. Treasury Sanctions and Legal Measures
The U.S. Treasury’s move to impose sanctions on Ly Yong Phat and his enterprises comes under the auspices of the Global Magnitsky Human Rights Accountability Act. This act targets those who engage in gross human rights violations and corruption that threaten international stability and economic systems.
OFAC’s sanctions seek to freeze assets and restrict financial operations connected to the Cambodian tycoon. These measures intend not only to penalize the individuals and entities responsible but also to protect the U.S. financial system from being abused by illicit activities linked to criminal enterprises operating abroad.
Additionally, federal prosecutors in Brooklyn have charged Chen Zhi, another implicated figure, with wire fraud and money laundering in connection to a multi-year crypto scam — showing the broad and international scope of the investigations and enforcement actions taken by the U.S.
Broader Context and Impact
This case highlights the increasingly sophisticated ways in which transnational criminal organizations exploit emerging technologies such as cryptocurrencies to facilitate fraud and human trafficking. The combination of digital financial tools with coercion and abuse represents a serious challenge for law enforcement globally.
Victims of the scam are often sourced from poorer regions, then forced into operations that target their compatriots internationally, deepening the criminal network’s reach and impact. The government’s coordinated rescues and sanctions demonstrate a commitment to dismantling these illicit networks and protecting human rights.
The Cambodian government and international partners face ongoing pressure to address these abuses and improve oversight of industries vulnerable to exploitation, including tourism and finance sectors tied to such criminal activities.
Reporting and Further Actions
The U.S. Department of the Treasury encourages anyone who believes they have been victimized by internet crimes, including cryptocurrency scams, to file complaints with the Internet Crime Complaint Center (IC3).
The unfolding investigations and legal proceedings in this case are expected to continue exposing individuals and entities involved, aiming to bring them to justice and disrupt the financial infrastructure supporting human trafficking and cryptocurrency fraud.