U.S. Sanctions Cambodian Senator Ly Yong Phat for Crypto Scams and Human Trafficking
The U.S. Treasury’s Office of Foreign Assets Control, OFAC, on September 12, 2024, imposed sanctions on Cambodian Senator Ly Yong Phat for operating crypto scam centers that utilized trafficked workers. This action is taken after investigations revealed the senator’s connection with serious human rights abuses related to his diversified business empire.
Ly Yong Phat’s Crypto Scam Operations Exploited Trafficked Workers
In a news release, OFAC described that Ly Yong Phat, through his conglomerate L.Y.P. Group Co., LTD, and his O-Smach Resort, subjected the trafficked workers to crypto scam operations. Entities belonging to him have been linked to numerous cases of human trafficking, forced labor, and physical abuse in the last two years.
Victims were lured into this network of exploitation in O-Smach Resort. Upon arrival, they were asked to hand over their phones and passports to the owners, while making them commit fraud in crypto activities, according to reports citing unimaginable abuses, including beatings, electric shock, and extortions, with some going further to commit suicide.
Properties Tied to Human Rights Abuses
The sanctions reach to many of the other properties of Ly Yong Phat: Garden City Hotel, Koh Kong Resort, and Phnom Penh Hotel have also been found to be involved in human trafficking and forced labor. Hence, the businessman is a front-runner in financial fraud and human rights violation.
U.S. Freezes Assets of Ly Yong Phat and Affiliates
Included in those sanctions is the freezing of all assets belonging to Ly Yong Phat and his entities that are in the United States or within the control of U.S. persons. This action blocks all property and interests in property of Phat and those entities, prohibits U.S. persons from engaging in transactions involving any blocked property unless specifically authorized.
These sanctions are to cut off the financial resources to those traffickers and ensure their activities do not touch the U.S. financial systems. In this respect, OFAC reinforces the commitment to combat human trafficking as well as illicit financial activities on an international scale.
Reaction by Cambodian Government
The Cambodian Ministry of Foreign Affairs expressed “deep regret” over the move by the U.S. Treasury, which had condemned such measures against Ly Yong Phat and his properties. In spite of the backlash, however, the U.S. Treasury insists that such sanctions are important in disrupting the networks responsible for forced labor and crypto-related fraud.
Broader Crackdown on Crypto-Related Illicit Activities
That is part of broader sanctions by the U.S. to target individuals and organizations who misuse cryptocurrency. In early 2024, the U.S. Treasury levied sanctions against a crypto operator affiliated with Hezbollah, and in March, the crypto mixing service Tornado Cash was sanctioned for its role it played in laundering funds for North Korea’s Lazarus Group.
The surge in crypto scams, particularly in Southeast Asia, has obliged global governments to take more severe action toward holding accountable those involved in financial fraud and human trafficking.
