.png){kind=logo}
The US Department of the Treasury has sanctioned Cambodian businessman Ly Yong Phat and his company, L. Y. P. Group, in a major step against human rights violations and fraud. The sanctions stem from serious violations involving human trafficking, forced labor, and cryptocurrency fraud by businesses owned by the tycoon.
The Treasury’s actions consist of freezing all of Ly Yong Phat and his related parties’ assets within the United States and preventing any dealings with Americans. This follows findings made by OFAC, detailed investigations that exposed that the entity was involved in deceptive practices associated with virtual currency and foreign exchange schemes; this decision began from Thursday.
According to the report, people were tricked into depositing their money in these criminal ventures. Such criminal activities as outlined by OFAC are primarily perpetrated by South East Asian crime cartels that have lately been involved in cyber related financial offences.
The FBI’s Internet Crime Complaint Center revealed that the loss amount from cryptocurrency investment scams has increased by 53% from $2.57 billion in 2022 to $396 billion in 2023, stressing on the rising danger of such scams.
These sanctions revolve around victims of human trafficking, most of whom ended up working in businesses such as the O-Smach Resort, which is also owned by Ly Yong Phat. According to the 2024 TIP Report, these workers experience not only economic exploitation but also physical and mental abuse, as well as being resold to other types of exploitation.
Speaking on behalf of the US government, Acting Under Secretary for Terrorism and Financial Intelligence, Bradley T. Smith explained the government’s determination to eliminate networks behind such heinous acts. He said, “Today’s action speaks to the government’s willingness to prosecute actors involved in human trafficking and the like.
The measures taken by OFAC are in relation to Executive Order 13818 that arises from the Global Magnitsky Human Rights Accountability Act. This framework is aimed at apprehending owners, controllers or participants of sites designed for committing serious crimes in the sphere of human rights violations and corruption, as well as using cyber and virtual space to achieve their goals, including fraud.
The measures taken against Ly Yong Phat and his companies both illustrate the links between human rights violations and the opaque activities existing in the cryptocurrency space. Through the denial of access to the U S financial systems and the restricting of the ability to transact internationally, the Treasury seeks to reduce the effectiveness of the criminals in generating funds and the continuation, support and sustenance of these types of crimes.
This case also addresses broader issues related to how regulators and enforcement agents are trying to contend with the new problems created by digital currencies and other internet-based financial activities. Cryptocurrency is global by nature, and people consider it a virtual anonymous system of payment through which they can easily engage in various unlawful activities such as money laundering and financing of terrorism.
