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Southeast Asia is becoming the heart of a troubling trend: more and more people are using cryptocurrencies to help with human trafficking, forced labour in scam compounds, and other networks of abuse. The new Chainalysis report, “Cryptocurrency Flows to Suspected Human Trafficking Services Surge 85% Year-over-Year,” came out on January 27, 2026. It shows that the total value of crypto transactions linked to suspected human trafficking services rose sharply in 2025, making ASEAN countries the center of this shady economy.
The research says that illegal on-chain cryptocurrency activities linked to human trafficking and other cyber-enabled crimes reached over $82 billion worldwide in 2025, which is more than eight times the amount reported in 2020. Chinese-language Money Laundering Networks (CMLNs) now make up about 20% of all known illegal crypto transfers around the world. Last year, these networks moved almost $16.1 billion in illegal money, or about $44 million per day across more than 1,799 active wallets.
The main reason Southeast Asia is in the news is because of the fast growth of scam compounds—big, often fortified buildings where victims are trafficked, detained against their will, and forced to execute online fraud operations that target victims all over the world. Cryptocurrency is a big part of how these compounds work. They use it to pay for things like recruitment fees, operational costs, and sending profits back home. Most of these compounds are in Cambodia, Myanmar, Laos, and the Philippines.
How Crypto Helps People Smuggling Operations
Chainalysis says that stablecoins, especially USDT on the Tron network, are the most common way to pay for things that are involved in trafficking. Stablecoins offer a number of benefits for criminal groups:
- Compared to Bitcoin or other volatile tokens, price stability lowers the risk of price changes.
- Transfers across borders that happen almost instantly and cost very little go around regular banking channels that are constantly watched.
- The pseudonymous aspect of the system lets money transfer quickly without having to identify the other party right away.
- Major exchanges have a lot of liquidity, which makes it easy to turn assets into cash or other assets when you need to.
Recruitment rewards usually range from $1,000 to $10,000 per victim and are commonly sent to recruiters or middlemen in stablecoins. Once victims get to fraud complexes, they utilise bitcoin to pay for food, protection, and to move money out of the area. Many compounds pretend to be “online gaming” or “customer service” centers, but investigations have shown that they are actually places where people are forced to work, physically abused, and sexually exploited.
Telegram is an important part of the operating infrastructure. “Guarantee” platforms on the messaging app act as escrow services and reputation hubs, linking criminals who want to launder money with others who can help them do it. These services help people trust each other without really handling money. When police shut down certain channels, operators quickly move to new ones to keep things going.
Chinese-language networks as important helpers
One of the most surprising things the research found is that Chinese-language laundering networks are the most common. Since 2020, CMLNs have developed very quickly, processing funds far faster than centralised exchanges and DeFi protocols. These networks provide a complete set of services:
“Running point” brokers provide you initial access to bank accounts and exchange profiles.
Money mule networks for moving and hiding money.
OTC desks that aren’t official but let you trade bitcoin for cash.
“Black U” services that openly sell stolen goods at lower prices.
The networks are quite professional and work like real financial services, including customer support, escrow systems, and reputation systems. Chainalysis connects them to bigger crimes that cross borders, such pig slaughtering frauds that have stolen tens of billions of dollars from people around the world. In 2025, CMLNs handled more than 10% of the money made from pig butchering.
The choice for Tron-based USDT is strategic: costs are usually less than $0.01 per transaction, settlements happen almost instantly, and the liquidity is deep enough to handle big volumes without too much slippage. This makes Tron the best chain for high-frequency, cross-border transfers that are under sanctions or regulatory pressure.
Problems with enforcement and some successes
Law enforcement has caused some problems, but they are still limited in what they can do. In 2025, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) named Huione Group, a big player in Southeast Asian crypto laundering, as a top money laundering concern. The US and UK have both put sanctions on a number of groups linked to CMLNs. Chainalysis, on the other hand, says that these moves mostly affect visible platforms instead of core operators. This lets networks easily react by moving to new channels or jurisdictions.
It is harder to enforce rules on public blockchains since they are decentralised and anonymous. Once money enters the ecosystem, it is very hard to trace because services like Tornado Cash (before its sanction) mix it up quickly and domestic exchanges send it back out. A lot of the victims live in places where it is hard to look into cyber-enabled crimes that span borders.
What this means for crypto regulation
The report highlights a key policy challenge in the digital asset age: public blockchains offer unmatched financial connectivity and inclusion, especially in developing markets, but they also open up new ways for serious crimes like human trafficking and forced labour exploitation to happen. Stablecoins on low-fee, high-speed chains like Tron have worked especially well for these reasons because they are cheap and have a lot of liquidity.
The results make things hard for regulators. If stablecoins are banned everywhere, it could hurt real users in high-remittance corridors and emerging economies. At the same time, letting flows go without limits lets criminals do business on a massive scale. The balance is still hard to find.
Chainalysis says that cryptocurrency will probably still be an important tool for both regular people and criminals in tight spaces. The same infrastructure that helps people deal with capital limitations also helps networks of exploitation as the economy continues to be unstable and foreign pressure is high.
The report is both a warning and an example. Public blockchains can help people feel included and strong, but they also make it harder to follow the rules and punish people on a large scale, which is hard for traditional methods to do. In the years to come, one of the most important jobs for regulators will be to find effective, focused solutions that don’t stifle real innovation.
