Myanmar continues to crack down on fraud operations in the “scam capital” of Shwe Kokko on the Thai border. Since 2017, the once-rural village has become synonymous with crypto scams and illegal online gambling. But some news reports suggest the crackdown is more show than substance.
In the latest series of raids, police arrested more than 2,000 foreign workers, reports Malaysian-based news site The Star. They seized and destroyed more than 3,300 computers, almost 22,000 mobile phones and other equipment used in online gambling. Authorities have detained former workers pending deportation.
Following the raids, the government systematically sealed or demolished the illegally built structures and broadcast the demolitions on state-run media. As of Saturday, crews had levelled 270 out of 635 buildings.
Is Myanmar crackdown an illusion?
Myanmar has reportedly targeted Shwe Kokko in its “final battle” to eradicate the multibillion-dollar fraud network. But officials may be less committed to the shutdown than they claim. The Irawaddy reports that thousands of scam workers have not been deported at all, but simply relocated to cities throughout Myanmar.
The New York Times likewise suggested the demolitions were “performative”, a strategy by the Myanmar junta to placate Beijing, which opposes scams that victimise its people.
“Just blowing up a bunch of empty buildings in an angry, haphazard fashion might be demonstrative of a show of force,” transnational crime expert Jacob Sims told the Times. “But practically, it’s nothing. No kingpins of KK Park have been turned over.”
In a similar case, organised crime gangs turned the once-sleepy border town of Laukkaing into a hub of criminal activity. Starting in the early 2000s, they developed unregulated gaming halls, houses of prostitution and online scam operations.
Before their arrests, the notorious Bai family ran 41 scam factories in Laukkaing on China’s northeastern border. There they conducted “pig-butchering scams”, building seemingly trusting romantic or financial relationships with online victims, then stealing their money, often via cryptocurrency transactions.
Trillion-dollar global threat
Online scam workers themselves may also be victims, lured into an illegal industry, then subjected to imprisonment, abuse and torture.
According to the United Nations Office of Drugs and Crime, a number of Asian border towns have become “strongholds” for transnational crime syndicates dealing in human trafficking, drug distribution, illegal gambling and “industrial-scale money laundering”.
UNDOC estimates that losses from cyberfraud in East and Southeast Asia topped US$18 billion in 2023, and may have amounted to $37 billion. Globally, these scams were estimated to cost consumers more than $1 trillion per year.
Myanmar has intensified efforts to shut down suspected online fraud in the “scam capital” of Shwe Kokko, demolishing almost 300 compounds.