$15 Billion crypto seizures, SouthEast Asia scam compounds with thousands of victims and the life savings of hard working professionals being wiped out by transnational criminal organizations. In this episode, Andrew Fierman (Head of National Security Intelligence, Chainalysis) and Erin West (Founder, Operation Shamrock), don’t hold back in sharing the nuances of pig butchering, national security and everything to do with crypto sanctions and victim support.
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Public Key Episode 174: Tackling Crypto Scams: A Global Fight Against Pig Butchering
$15 billion crypto seizures, Southeast Asia scam compounds with thousands of victims and the life savings of hard working professionals being wiped out by transnational criminal organizations. In this episode, Andrew Fierman (Head of National Security Intelligence, Chainalysis) and Erin West (Founder, Operation Shamrock), don’t hold back in sharing the nuances of pig butchering, national security and everything to do with crypto sanctions and victim support.
Erin describes the comprehensive scam strategies and shares her perspective as she travels the world and investigates steps away from some of the biggest scam compounds the industry has ever seen.
Andrew emphasizes the enormous scale of financial operations linked to illicit activities, evidenced by the staggering figures tied to entities like Huione and Prince Group and the importance of cross-sector collaboration and proactive regulatory measures in mitigating these threats.
Through real-life anecdotes and expert analysis, the episode provides listeners with a deeper understanding of the complexities and ongoing efforts to combat transnational organized scam networks.
Quote of the episode
”If people realized the magnitude of what was happening, I think there might be a little bit more fire in our belly about working toward a solution.” – Erin West (Founder, Operation Shamrock)
Minute-by-minute episode breakdown
2 | Introduction: Crypto Natsec and Pig Butchering
4 | Erin’s Background in High Tech Crime
8 | Understanding Pig Butchering Scams
15 | Global Collaboration Against Organized Crime
18 | Gift Cards as a Money Laundering Tool
22 | Southeast Asia Scam Compounds
27 | Chen Zhi and Prince Group’s Sanction Analysis
30 | Practical Advice on How Anyone Can Combat Pig Butchering
33 | Closing Thoughts and Resources
Related resources
Check out more resources provided by Chainalysis that perfectly complement this episode of the Public Key.
- Website: Operation Shamrock: Educate. Mobilize. Disrupt: Stopping Scams Together
- Podcast: Stolen: A Podcast with Erin West
- Article: The Pig Butchering Lifecycle: Organized criminals use a highly scripted process and human trafficking to get as much money as they can from individual victims.
- Article: How scammers use crypto ATMs to launder millions from victims
- Blog: DOJ Seizes $15 Billion in Bitcoin as U.S. and U.K. Target Massive Southeast Asian Crypto Scam Network
- Blog: Five Key Takeaways from MSMT’s Report on North Korean Cyber Operations
- YouTube: Chainalysis YouTube page
- Twitter: Chainalysis Twitter: Building trust in blockchain
Speakers on today’s episode
- Andrew Fierman (Head of National Security Intelligence, Chainalysis)
- Erin West (Founder, Operation Shamrock)
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Transcript
Andrew F.
Hello everyone. My name is Andrew Fierman, and I will be your host today on this episode of public key today, I’m really excited to be joined by Erin West, and we are going to be speaking about the scam ecosystem and its overlaps with national security. Erin, I think you’ve probably been on this show more than most anyone, if not the leading all time. But for those of you who might not know you, could you give our listeners a little bit of a background about what brought you to this space and what you’re doing today.
Erin W.
Sure, I was a prosecutor for 26 and a half years in Santa Clara County. The last eight years of my career, I did high tech crime, and that involved the tracing of cryptocurrency. So I was able to get a jump on the state and local level at how we can use the blockchain as an amazing investigative tool. The last three years of my career, starting in 2022 I was deluged with a whole new type of crime that we had never seen before. We were familiar with romance scams, but we had never seen anything like this new scam that was known as pig butchering. And what we saw, I’m sure a lot of your listeners are familiar with pig butchering, but but the key to pig butchering that was so egregious was it was draining people of every penny they had. We had never seen victims that were this decimated, and so I thought as hard as I could for three years as a prosecutor, and then actually, it’s historical with relation to chainalysis, because I thought more and more about what needed to be done on a global level about this. And it was at chainalysis links on the main stage that I introduced the idea of Operation Shamrock, that we need to be cross sector, working together, sharing information and fighting transnational organized crime as a unit. That this isn’t just a law enforcement problem. It’s not just a crypto problem. It’s all of us.
Andrew F.
Yeah, when I think about pig butchering and this scam ecosystem, it’s about a lot of different things. It’s about the victims, it’s about the scammers, it’s about the technology. It’s about the scam compounds and the human trafficking. And there’s so many different angles to this. It’s not just a crypto problem. It’s not just a scammer problem. It’s not just a victim problem. It’s this whole ecosystem that that needs all of us, I think, in the fight to figure it out.
Erin W.
I appreciate you saying that, because I think more and more, anytime I speak anywhere, I realize, oh, goodness, you have a piece of this too. Like I just spoke at the gift card association, and then I found out from someone who works in high end retail about Chinese nationals coming into their high end retail store and putting 10s of 1000s of dollars on gift cards. And it was like, Okay, there’s another money laundering angle that I did not see. And so the point is, I’m so glad we’re talking about this on public key, because this really affects every single part of the ecosystem, from just literally everyone on your block getting hit with these
Andrew F.
texts. It’s funny, you even mentioned that, because from our perspective on the cryptocurrency side, we’re also following these advertisements on platforms where they’re offering money laundering services, and one of those services, laundering via crypto is in exchange for gift cards. So that aligns right with what you’re saying. And I just until now, don’t have that context of, you know, the Chinese nationals walking into the stores to load up the gift cards, right? So it shows the interconnectivity of this challenge that’s forever ongoing
Erin W.
and the gravity of it that like they are going to use any literal, any way you can move funds they’re going to use. So if anybody is touching money in any way, you’re part of this. So you need to be prepared to understand the threat and the gravity of what’s happening on a national security level. So I’m glad I’m here with an expert to talk about that
Andrew F.
part too. Absolutely. You were recently traveling to Southeast Asia to expose some of these camp compounds. Could you tell us a little bit more about your trip and what you saw while you were there?
Erin W.
Sure when I was a prosecutor, I wanted to know where this was coming from and why this was so effective. And what I found was this is happening at scale in Southeast Asia in I describe it as I just moved two kids into college. I am very familiar with a dormitory, and this is happening in dormitory style buildings with bunk beds in them and eight people to a room. And it’s really hard to explain the massive size of what’s happening there that that it’s not just one dormitory building, it’s a dozen of them surrounded by a two foot tall concrete barrier so that they can’t get out with one gate. And that one gate is guarded 24/7 by men with AK 40 sevens. And that’s just one example. And if you there are hot spots in Southeast Asia like the Thai Myanmar border, where there are dozens upon dozens of them, just like that. KK Park in Myanmar is a full on city that is hundreds of buildings that have been constructed for the sole purpose of stealing all of our money. The size, the gravity, the scale, the magnitude, I think, is really unappreciated. And globally, that if people realized the magnitude of what was happening, I think there might be a little bit more fire in our belly about working toward a solution.
Andrew F.
For our listeners, these aren’t cities that already existed, or they weren’t even towns. These were just forests, just months or years ago that are now, you know, full on cities of this. And if you see some of Erin’s social media, you can see the growth and development in these compounds over the years. When we’re talking about the scale of it, I think that the incredible part of it, from my perspective, is looking at the on chain activity and the scale is similar. I mean, when we’re talking about Hui, one pay platform, the cryptocurrency exchange function, has done nearly $100 billion in inflows in four years of operation, where they really took off following the start of the pandemic. And we’re looking at the prince group as well, which was just sanctioned by OFAC just a little bit over a week ago. And $15 billion was seized through that so when you’re talking about scale, that scale is happening physically and on chain and in traditional finance. And you know, it’s ending up in people’s homes Well, and
Erin W.
that’s what I was aghast about with this prince group situation and the $15 billion first of all, $15 billion the biggest forfeiture action ever to be brought in the United States, but it just shows the magnitude of how much money was going through that man’s fingers, Chen Ji and so brought up Hui won group. And I think it’s interesting to kind of unpack that a little bit and look at specifically how Hui won was being used, and what that was. Can you tell us a little bit more about that? So
Andrew F.
Hui one group is a whole lot of things. You have a cryptocurrency exchange, you have a guarantee platform, which I’ll explain in a minute. You have gambling websites and a whole host of other opportunities to advertise for everything from scam technology to money laundering capabilities to human trafficking. And when you’re looking at platform that is doing that at such a scale, in that 100 billion dollar range, that’s a lot of money to be able to facilitate and provide the laundering capability and the liquidity for the proceeds of this activity. So from Hui ones guarantee side of things, this is essentially a platform that’s similar to what I think most of us would recognize as Craigslist, but Craigslist for really bad guys, and essentially, what you’re looking at is these bad guys are able to post advertisements offering services or technology, and then anyone who’s looking to execute a scam or facilitate money laundering as a result of their scams can reach out to these advertisements and have them help facilitate I’m talking about scam technology, which I think is really the backbone that facilitates these scammers. When you think about how you got a cell phone text from a random number, Where’s that coming from, somebody stole your data and is now selling it on a secondary market and offering it up for sale via cryptocurrency. When they send you pictures and route you to their social media pages of an attractive person that is also purchasable. You can purchase aged social media accounts when they ask you to get on a phone call or a video chat and prove that you’re real, they can buy AI voice and facial recognition software, and then when it’s time to extract that money, they point you to a website where it looks like an investment website, a gambling website, some other vehicle to take your money, and you can buy web development capabilities through that. So these are all things that go into the underlying infrastructure that creates the scam, and they can be bought pretty cheaply. Also on top of it, you can buy things like falsified KYC documentation and passports and other aspects that help you get onto exchanges and launder your illicitly obtained proceed. But in case you don’t want to sign up for a cryptocurrency exchange, you can also just go straight to the money laundering advertisements, where they offer everything from crypto to crypto swaps to crypto for suitcases full of cash, really, whatever your cup of tea when you’re looking to launder money, it’s all available via these platforms. And while Hui won has been largely spoken about in the news and disrupted, there are a lot of other guarantee services that kind of act as these aggregation points. They’re operating on telegram primarily, and these vendors who are utilizing them are agnostic to which guarantee service they’re using. But they’re doing this at scales of, you know, 10s and 10s of billions of dollars, and it’s not slowing down.
Erin W.
I remember the first time you told me about this, because just like we were saying earlier, how many threads there are to this entire ecosystem I hadn’t really thought through. How do the bad guys get their SIM cards? How do the bad guys get their phones? How do the bad guys arrange for travel for people? And what you showed me was literally everything you could possibly need to set up your scam operation. Was available on this publicly viewable guarantee.
Andrew F.
Yeah, and I think we’re not talking about a high entry barrier here. The voice and facial recognition software costs just $200 and that’s probably one of the more expensive things outside of your money laundering aspect that you’ll spend money on in the course of doing this. So the opportunity for someone who’s looking to execute these scams is just a matter of finding the guarantee platforms and interacting with these vendors. So Erin, I know you see the other side of this. Are there any stories that come to mind of the victim side of it, and cases that are top of mind to you that you wanted to talk about with us today?
Erin W.
Sure, at Operation shamrock on Fridays. We do one on ones with victims, and we do this for the purpose of number one providing them a place where they will get honest, accurate information to set their expectations. I think that’s something that’s really lacking for victims, is they don’t feel heard, understood, and they really don’t know what to do about this. So we provide that, but then from them, we learn a lot. We learn about what’s happening on the ground right now. We learn where the gaps are in law enforcement and in the financial industry and and we take that information and we anonymize it and give it back to those industries. But in doing that, this entire year, I’ve learned a lot about what’s happening out there and what’s happening out there is generally the same flavor of scam is happening over and over and over. When I talk to victims, for the most part, I can already anticipate the next thing they’re going to say, because it happens the same way, but there’s always a different flavor. So I’ll give you an example. I spoke to this lovely woman, and I think it’s important to like set the record straight from the outset of this is happening to people you know. This is not something happening to only elderly people or only highly vulnerable people. This is happening to people you know. So I’m speaking to this woman last week. She’s lovely, she’s attractive, she’s grounded, she does yoga, and she moved to another part of the country where her niece lives, and her niece was doing a volleyball thing, and asked her, Will you post this on your Instagram to get people to like it? And so she made her Instagram public for one week. And while it was public, there’s a comedian she knows that a lot of people know that I didn’t know at the time, and his name is Matt rife. And she liked something Matt rife said, And not long later, she got a response from someone claiming to be from Matt rice PR team, saying, Hey, we reach out to certain people who reach his site. There’s a special page for his dedicated fans. We’d like to take you there. And then not long later, she started hearing from Matt rife, okay, so you’re saying Erin West, this is a typical romance scam. I’ve heard it 15 times, but what I had not heard was Matt Reif sending voice memos to her, and I was like, did it sound like him? She’s like, it sounded exactly like him, and was funny like him. And now we know that this can be done with voice cloning that chat GPT can create things that sound not just words that sound like things he would say. And so all the methods that we would normally use to protect ourselves are failing, and they can get around them. But another piece of this was he sent her flowers like that. Was another piece I hadn’t heard that’s how good they are and how clever they are, and how all the awareness that we try to provide to them, the enemy turns on its head and manages to figure out a way around I guess the what I would say is the takeaway here is this is happening to people. You know that you would not suspect this is happening to and it’s happening to them in a very real way that feels very genuine. I
Andrew F.
think the thing that continues to keep me awake at night is thinking about every time I have conversations about this, a lot of people don’t even realize this technology exists in the capacity that does today. And so if we don’t even have the education out there loud enough that people are able to understand that this exists, it’s going to be really hard for them to detect when it’s happening. And I think the work that you do, obviously, is amazing in getting the word out there. I think the other thing that’s crazy is the back end of this too, which is it’s not just about being scammed. It’s the recovery firms that are also scammers. Oh, it’s like you’re breaking trust down in multiple ways. Like, I’m curious if you have experienced that, and if you have any anecdotes or stories to
Erin W.
tell. Yeah, I think that that is, that is yet another unknown part of this, which is that once this happens to you, you will be put on a list, and you will be a known person who has, who has had their money stolen from them, and now you are even more likely to get hit up again, and likely hit up again in the way of I heard that this happened to you. We are a recovery agency, and people will spend 10s of 1000s of dollars trying to get their money back. And so Andrew, it also feeds into this whole like victims are still not getting help, so they are reliant on things that they can Google and Google, who is actually a good ally in this industry, is still identifying ads and providing those ads for people that are scammers that want to take advantage.
Andrew F.
So you think this is a question that could probably take up an entire. Entire episode in and of itself, so I’ll try to narrow it down a bit. But how do we go about tackling this challenge? I mean, I think there’s every different degree of it, like we’ve talked about, but like, Where does somebody who’s been scammed even start to tackle this problem once they’ve been scammed, beyond just the psychological aspect of what’s
Erin W.
just happened? You’re very right to point out that there are so many pieces of this, so I spend a lot of time thinking about the victim experience, and the victim experience is rough in the United States. I mean, their true experience for the most part, and things are getting better, definitely, but for the most part, their experience is reporting to a local law enforcement agency who isn’t going to be able to help them because they lack tools, training, bandwidth and then reporting to the federal government and hearing nothing back for the most part. That’s their experience, and their experience next is realizing that they’ve had it’s really hard to put into words what it must feel like to lose your entire net worth. I don’t think anyone can appreciate what that feels like, and then to think and nobody cares. How is this happening in the United States, that I’ve been a loyal citizen, paying my taxes, doing the right thing my entire life, and then when I try to report this, there’s no one there. And then, yes, this situation of we talk a lot about the financial recovery piece. What we don’t talk about is, oh my god, what is the mental health recovery piece for someone who really was sold a dream and thought that they were going to live the rest of their life with someone, and that person was betraying them from the jump. It’s excruciating. And so I think of the solutions that are within my capability, and within my capability is creating a website that has a lot of information on it, that has stories about people that are like them, that refers them to AARP, to support groups to there’s other fantastic support groups give an hour and then trying to educate them. And then we do victim group meetings every other month with an expert, like someone who can help them go through the tax implications of this, or someone who can help them understand the psychological implications of what’s happening.
Andrew F.
Yeah. I mean, just hearing it is overwhelming, thinking about what someone would go through. I think one of the benefits of the blockchain, at least as the mechanism for this, is that there is potential opportunity for disruption if it’s enabled right, and the transparency of the blockchain gives that opportunity to potentially disrupt at the point of cash out. Certainly we are seeing a lot more focus on this from a broader national security perspective, and I think that’s a great thing in the grand scheme of getting this problem elevated to the place it needs to be, because we’re talking about an industry that’s, you know, taking away everyone’s life savings in the realm of billions and billions of dollars.
Erin W.
Yeah, I want to ask you about that, because that is your wheelhouse. That’s your hotspot. Tell me a little bit about your background that leads you to this expertise in national security. Yeah.
Andrew F.
So by trade, was a sanctions compliance professional focusing on identifying how sanctions evasion was happening in traditional finance, and over about a decade in the banking sector, trying to figure out this problem. I was really lured to the cryptocurrency side of it, because the assumption is bad guys are always going to seek to be bad guys, and there’s this new financial tool out there that they can utilize, potentially to evade detection. And so I got drawn to this world, and fortunately, was able to find my way here to chainalysis, and for those first few years, was really focusing on things like entities that are subject to sanctions, and the growing focus on cryptocurrency related sanctions designations. You know, just in 2018 2019 we were looking at ransomware operators or very small single actor use cases of crypto related designations to today, where we’re talking about Iran’s Islamic Revolutionary Guard Corps facilitating oil and commodity shipments via crypto in the range of $2 billion in just a year’s worth of sanctions designations. We’re talking about the Prince Group and buy X, which is the exchange that was affiliated with Prince Group and xinbei, which was sanctioned by the UK’s offsea, doing billions of dollars of activity. And I think seeing the growth in the focus on cryptocurrency related crime has been really fascinating from my perspective, but lately it’s taken this much more scam and scam ecosystem focused approach. So, you know, like I mentioned, with Prince Group, also, FinCEN found that Hui, one group, was a primary money laundering concern, and they’ve now been included. And we’re talking about entities that are doing massive volumes of activity that are touching the lives of, you know, American citizens cryptocurrency exchanges that have us touch points. And so the opportunity to potentially cut these operations off from mainstream financial ecosystems, I think, is a really critical aspect of disrupting the networks. And so we’ve seen these actions happen, and with. The case of Gen Z, you know, $15 billion is subject to seizure. That’s that’s not a small chunk of change in the realm of a criminal, even if you’re doing more money than that overall when you’re longer
Erin W.
so I want to get to the 15 billion in a minute, because I’m fascinated by that, and I want to do a deep dive. But what I’m interested in is, I think that for a lot of the industry, we hear these terms about okay, we want to sanction we want has been designated by FinCEN. Can you give me some ideas of what that means, in very real terms, about what is happening with those entities and what that looks like, and how effective it is in limiting their ability to move funds.
Andrew F.
So essentially, when a regulatory body sanctions an entity when it comes to cryptocurrency, that means all of their cryptocurrency related assets are tagged in blockchain analytics tools as now being a sanctioned entity. Any cryptocurrency business that’s utilizing blockchain analytics will have a plug and play mechanism with transaction monitoring to ensure that they aren’t transacting with any entities they’re not supposed to. So the second that switch gets turned on and they are marked as a sanctioned entity, or, you know, a FinCEN 311, special measures entity, those businesses will stop allowing their customers to send withdrawals from their exchange. And if they were to receive funds from one of those platforms, they would be able to block and disrupt those funds from ultimately reaching their destination. So essentially, what it does is it blocks these operations off from the mainstream exchange ecosystem where a lot of bad guys are going to seek to get their liquidation or liquidity for I mean, going back to our guarantee service advertisements, there are even legal services that will help you try to unblock your funds once you oopseed and sent money from your sanctioned entity, like buy X into a mainstream exchange and gotten your funds held. So in reality, it’s stopping them from the mainstream exchange ecosystem, also maybe pushing them down further deeper, darker rabbit holes, which turns into the form of these money laundering advertisers, where they’re just going to say, Hey, listen, I have $10 million maybe I want to meet somewhere and swap cash for crypto or telegram based over the counter services, where they’re just representing, As you know, cash to crypto or crypto to crypto swap services that are unregistered, not related to any specific entity, just a telegram handle with a cryptocurrency wallet and offering these types of services. So I think there is a ecosystem that is being built around the capability of laundering money with the intention of trying to avoid detection of utilizing mainstream exchanges. I mean, there’s even these services we call black use services, which will consume illicitly obtained stable coins, and they will give you clean stable coins in return for a fee. Or alternatively, you can buy the illicitly obtained a stable coin and at a discount, and so you can go launder it. These services are existing in a way that are intentionally attempting to disrupt the path of exposure to the initial points of the scams themselves, of major hacks from places like North Korea, of scam compound proceeds. And I think that probably brings us to Chen z and the 15 billion pretty, pretty nicely.
Erin W.
It sure does. But I want to ask one more question about that, because I think that my advocacy about transnational organized crime has been consistently use every tool in our arsenal. Let’s use the FinCEN designation, let’s use sanctions, let’s use indictments. Let’s use diplomatic pressure. And so we’ve seen a situation where the US government, in the past couple weeks has really done a lot of that. We’ve seen a president over there. We’ve seen an indictment. We have seen sanctions 311, we and now we’ve seen this $15 billion that is in the possession of the US government. So what we have seen is we’ve got the US government in possession of $15 billion tell me what that means in the ecosystem. How big a deal is
Andrew F.
that? I mean, it’s the biggest crypto seizure of all time. This is a big deal, certainly. And I think one of the fascinating things, though, that we’ve seen as this has developed is, firstly, kind of winding back a little bit the Prince Group and Chenxi were known for utilizing cryptocurrency mining to facilitate generating new Bitcoin, but really in a method to launder large scales of cryptocurrency. And so while four cryptocurrency addresses, Bitcoin wallets were included in his designation just when the action happened, I think on October 14, just yesterday, OFAC actually updated Chen sees designation included an additional 25 cryptocurrency wallets that belong to him, where he’s still currently seeking to launder, you know, billions of dollars that are still out there. So. The job isn’t done yet. But certainly, I think this is a historic moment in being able to seize and disrupt a scam compound financier at a scale that really hurts
Erin W.
them. Yeah, the amount is amazing. And so I wonder, in your opinion, and I’d love to share my thoughts as well, like, what do we do next? How do we continue to put pressure on not only Chen Ji. I mean, let’s be realistic, Chen Ji is one of many, and that’s really the ecosystem that’s happening in Southeast Asia, is there are a number of very well known people that we could do the same treatment on What’s your opinion about what should be done next?
Andrew F.
I think diplomacy and policy can go a long way. I think more stringent regulatory requirements in these jurisdictions. I’m not as familiar as the on the ground efforts you’ve had, but I’d be curious actually, from your perspective. Like, how do you think some of these countries in Southeast Asia are reacting to what’s happening on the ground with these scam compounds? I mean, we’ve seen KK Park, I think, just got raided again recently. But like, what does that mean in reality, and what’s going to happen on the happen on the
Erin W.
ground? Yeah, I’d love to clarify what’s actually happening in Southeast Asia, because I get frustrated when I see people that are my colleagues posting things like, kk Park is being dismantled. KK Park is being blown up when actually nothing of the sort is happening. What? There is always a big PR interest from the compounds to make it look like things are different. Make it look like they’re complying. The word Crackdown is frequently used, and there really isn’t a crackdown. What we’ve seen on two significant occasions in the past year is a situation where a decent number of people have been allowed to leave these compounds. In February, there was a big Exodus, and just this week from KK Park, my sources on the ground in Southeast Asia are saying that there are about 1500 people who have been transferred to Thailand for repatriation home. But those numbers are minute compared to the number of people that are in these compounds doing this work. So when we hear about 1500 people. We need to rejoice that 1500 families will have their loved one get back home. But the truth of the matter is that there are hundreds of 1000s that are still there, that people are being tipped off when these things are going to happen, and they’re moving their best people to other compounds. In no way should we believe for one second that there’s been any decrease in the amount of scamming that is happening out of Southeast Asia.
Andrew F.
So is this a smoke and mirrors game by the governments or by the people controlling these compounds? Is it just appeasement to make it look like they’re doing something? What? What’s happening?
Erin W.
Yeah. So you probably wonder, like, what’s the angle? Why would they want to do that? Well, I think that there are differing political interests in in this. There have been a couple of things. One was, there was a Chinese YouTuber that was led to believe he was coming to Thailand for a job. He got there, he was kidnapped. It was put inside, I think it was KK Park, one of the major Myanmar based. And that bothered China, and that’s when that first movement from China of really shaking things up and putting pressure. And I think when it comes to Cambodia, Cambodia has a big interest in making the world think that they are not the corrupt entity that is a scam nation. They don’t want the world to think that. But in fact, they are. So they’re doing things to make it look like they’re doing something about it, when at the end of the day, they actually aren’t. But if I could say one more thing about it, it’s not that the people of these nations are bad. It is that the Cambodian government is a government built on corruption, and so in order to make your life work in that nation, corruption is an important part of how you operate. The people of these nations don’t like that what’s happening in their countries, and they wish it could be different. This is very much a elite decision making process imposing these terrible situations on these places, on the globe.
Andrew F.
I mean, when you’re thinking about corruption in Cambodia, I come back to Hui one group, and I think the thing that is important to note here, this is not some tiny I mean, obviously not because of the volume, but this is not some unknown entity. This is like a major corporation in Cambodia. Everyone has their Hui one apps on their phones. This is a company that does travel services. They do financial services of various forms like this is not a small entity by any means. And so for them to be so embedded in this ecosystem, I think really just highlights exactly what you were just saying.
Erin W.
Well, exactly that’s how Cambodia works. And Al Jazeera drew our attention to that in 2022 when they started showing us pictures of the leaders of Prince Group, the leaders of Hui won in cahoots with the ruling elite. We knew this was a problem. And yes, anywhere you go in Cambodia, you’re going to see Prince Group, you’re going to see Hui won. These are the leading industries, and the US government has called them out as being corrupt and sanctionable.
Andrew F.
So Erin, if you had to provide some sort. A Blueprint here for your listeners of how do they combat pig butchering? What would you want to leave them
Erin W.
with? What I would say is, I know there are a lot of different types of people that listen to public key, so I’ll start with what a regular person can do in their regular personal life. And in your regular personal life, you should be talking at every opportunity you have about what is behind these scams, that those texts on your phone are coming at you from someone who has been human trafficked and beaten if they don’t make their quotas, that’s who’s on the other side of the phone, and that this is all being run by Chinese organized crime trying to steal a generation’s worth of wealth. It’s as easy as that when you start telling people that this is much bigger than you think it is, then that that enables them to have some sort of license in what they allow to transpire with them. So I think the message to the regular people is that we cannot trust anything coming at us electronically that we did not request. And then secondly, I think at a bigger level, the people that listen to public key have an interest in understanding how illicit money is moving and have an interest in their own shop. And so I always say, police your own part of this. I don’t know what’s happening in your business. I didn’t know that you were a high end merchant having Chinese nationals come in and buy gift cards, but you did. So now plug together what you’ve heard from Andrew and me on this call and think about, okay, well, gosh, that sounds like they’re laundering 1000s of dollars through our business. Let’s make that stop. So that’s what I would say. What about you?
Andrew F.
It is a tough challenge, and one that I often have a hard time wrapping around a really feasible outcome to dismantle and disrupt, right? I mean, disruption is one thing. Dismantling, I think, isn’t entirely other. But I think the focus by the US government, and you know, the UK, in these recent sanctions designations, really shows, from a governmental perspective, a focus on disrupting these networks. And I think you know, between that, between all of the notifications that come up when you go to a crypto ATM, however effective they may or may not be, I think some financial literacy and awareness of how this is happening in reality is really critically important, like it starts like you said, at the response of a text message or the clicking of an email that you got from An unknown sender. And so I think just that awareness piece and cutting off the access points are going to be critical. And you said it’s not biased to any specific group, even though there are some channels that do focus on what they call quickshaw, which is where they’re looking into people who they know are going to be easier targets, presumably age related focus, I would guess. But think just the continued awareness and the pushing out from different agencies of things to look out for red flags is going to be really important, and then having aggregated sources like your website, which I’m sure we should have pop across the screen here at some point on this, on this pod, but make sure that you know people have a point to know where to go if this happens to them,
Erin W.
and so the threat’s not going away. Bad guys are gonna bad guy. That’s what you said. They’re going to continue to move illicit money. Where are you thinking? Where should we be looking? I’ve
Andrew F.
always come at this from a compliance perspective, given my background, and I think proactive compliance is the path forward. And if you cut off their on ramp and off ramp point from into cryptocurrency exchanges, you can go a really long way. So there are these typologies in the way that these organizations and entities are laundering money. There are typologies in the way that they are utilizing and signing up for accounts. I think that point of disruption at the exchange will be really valuable. I think there’s a bigger problem, which, again, probably is another public key conversation, but digital fingerprint and digital footprints and digital identity more broadly, as those types of challenges get solved and it’s harder for people to use fake passports and fake driver’s licenses to get access to exchanges, the harder it will be for these people to get access to cryptocurrency funds, the harder it will be to facilitate the laundering of this underlying activity. And combine that with everything you’ve said, I have some hope, while I certainly think that scammers are going to find new ways. You know, I think there is potential opportunities to disrupt this
Erin W.
ecosystem. Yeah, I always think about just using every tool to make it more difficult, more expensive, more time consuming for them to do this work, and at some point that’s the best we have to offer.
Andrew F.
So I think on that note, Erin, I’d love to thank you for joining us today. It’s always a pleasure chatting with you. What’s the best method for our listeners to see what you’re working on, on the latest and greatest. Sure,
Erin W.
I’m very active on LinkedIn. I’m always talking about the latest things I’m seeing on LinkedIn. And I also have a podcast, and my podcast is called stolen with Erin West. It’s on Spotify and Apple podcasts.
Andrew F.
We’ll include those links in the post here. Thanks again for coming and look forward to working with you again soon. Thanks so much.