US Sanctions on Myanmar Crypto Entities Targeting $10 Billion Cyber Scam Network

On September 8, 2025, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) dropped one of the most aggressive financial sanctions in recent memory-targeting nine crypto-linked scam entities operating in Shwe Kokko, Myanmar. These weren’t just rogue traders or shady exchanges. These were organized criminal networks running forced-labor compounds where victims were held at gunpoint to scam Americans out of billions through fake cryptocurrency investments. And for the first time, the U.S. didn’t just freeze assets-it labeled the entire operation as modern slavery.

How Shwe Kokko Became the Crypto Scam Capital

Shwe Kokko, a small town on the Thai-Burmese border, used to be known for fishing and rice farming. Today, it’s a fortified zone of high-walled compounds, guarded by armed militias, where hundreds of people are trapped in digital torture chambers. These aren’t hackers in hoodies working from home. They’re people-many lured with fake job offers from Malaysia or China-who are then forced to run crypto scams 18 hours a day. If they fail to hit their targets, they’re beaten. If they try to escape, they’re sold to other gangs.

The Karen National Army (KNA), a non-state armed group operating under the protection of Myanmar’s military junta, controls this area. In exchange for a cut of the profits, the KNA provides security, electricity, and immunity from local police. The U.S. Treasury explicitly named the KNA as a transnational criminal organization, along with its leader Saw Chit Thu and his two sons. That’s rare. The U.S. doesn’t sanction militias unless they’re directly tied to massive, systemic crime-and this is one of the biggest cases in history.

The $10 Billion Losses No One Was Talking About

In 2024, Americans lost at least $10 billion to Southeast Asian crypto scams, according to the U.S. Treasury. That’s not a typo. Ten billion dollars. For context, that’s more than the entire annual budget of some small countries. Most of it came from elderly Americans, small business owners, and people trying to get into crypto for the first time. The scams were slick: fake Telegram groups, AI-generated influencers, and “guaranteed returns” on tokens that didn’t even exist.

Victims were told they were investing in “Myanmar Blockchain” or “Golden Coin,” a digital asset promoted by smiling people in suits holding golden bars. The websites looked professional. The testimonials were real-because they were from other victims, forced to record them under threat. Once money was sent, it flowed through dozens of crypto wallets, mixed with legitimate transactions, and vanished into private exchanges outside U.S. jurisdiction.

The Treasury didn’t just release numbers-they called it “modern slavery.” That’s not just rhetoric. It’s a legal trigger. Under Executive Order 13818, sanctions can now be applied for human rights abuses. That means the U.S. isn’t just going after money-it’s going after the people who profit from torture.

How the Sanctions Work

OFAC didn’t just blacklist a few companies. They went after the entire structure:

• Nine entities based in Shwe Kokko-each one a scam compound with its own servers, staff, and crypto wallets.
• Ten supporting entities in Cambodia that handled money laundering and crypto conversion.
• The KNA leadership: Saw Chit Thu, Saw Htoo Eh Moo, and Saw Chit Chit-all personally sanctioned.
• Any U.S. person or company that did business with them-even indirectly-is now breaking the law.

This means if you’re a U.S.-based crypto exchange and one of your users sent funds to a wallet tied to any of these nine entities-even if you didn’t know-the Treasury can freeze your assets. It’s a blanket freeze. No exceptions. No grace period.

The goal isn’t just punishment. It’s disruption. The U.S. wants to cut off their cash flow so hard they can’t pay guards, buy generators, or hire new victims. The Treasury says these operations are “large networks of scam centers” that rely on constant recruitment. Cut the money, and the whole machine collapses.

Why This Is Different From Past Sanctions

In the past, the U.S. sanctioned crypto exchanges like BitMEX or Tornado Cash because they were used for laundering. But those were platforms. This is different. These are not platforms. These are prisons with servers.

The U.S. used four separate executive orders to make sure nothing could slip through:

• E.O. 13851-Targets transnational criminal organizations.
• E.O. 13694-Covers cyber-enabled financial crimes.
• E.O. 13818-Sanctions human rights abusers.
• E.O. 14014-Allows action against those threatening Myanmar’s stability.

This is the first time all four have been used together against a single criminal network. It’s a signal: the U.S. is done playing nice. If you’re running a scam that uses forced labor and targets Americans, you’re not just a criminal-you’re a national security threat.

What This Means for Crypto Users

If you’re a regular crypto user, you might wonder: “Does this affect me?”

The answer is yes-if you’re using wallets or exchanges that have ever interacted with these sanctioned entities. OFAC doesn’t care if you didn’t know. If your wallet received funds from a flagged address-even one hop away-you could be flagged. Many U.S. exchanges have already started blocking transactions linked to Shwe Kokko and Cambodia-based addresses. Some have even frozen accounts with no explanation.

It’s not about guilt. It’s about risk. The Treasury’s message is clear: if you’re holding crypto that passed through a scam compound, you’re holding tainted assets. And if you’re in the U.S., you’re now legally responsible for not using them.

This has already changed how people move crypto. More users are turning to privacy coins, decentralized exchanges, and non-KYC platforms. But that’s dangerous too. The U.S. is watching those too. In fact, the Treasury’s next move may be to sanction privacy-focused protocols that make tracing these flows harder.

What’s Next?

The U.S. didn’t say this was the end. They said it was “the beginning of a broader campaign.”

Experts believe the next targets will be:

• Myanmar military officials who receive payments from the KNA.
• Chinese and Thai companies that supply the scam compounds with servers, SIM cards, and internet bandwidth.
• Exchanges in the Philippines and Laos that still process crypto from these regions.

There’s also growing pressure to sanction the Thai border authorities who turn a blind eye to the flow of people and money across the border. Some U.S. lawmakers are already drafting bills to cut aid to Thailand unless it cracks down.

And the human cost? It’s staggering. The Treasury estimates over 100,000 people are trapped in these compounds across Southeast Asia. Most are from China, Vietnam, India, and Myanmar. Many are teenagers. Some are children. They’re not criminals. They’re victims. And the U.S. sanctions are the first real attempt to free them-not just punish the bosses.

How to Protect Yourself

If you’re trading crypto, here’s what you need to do now:

1. Check your wallet history-Use blockchain explorers like Etherscan or Solana Explorer. Look for transactions to or from addresses flagged by OFAC. If you see one, stop using that wallet.
2. Avoid exchanges with ties to Southeast Asia-Many platforms still operate out of Cambodia, Laos, or the Philippines. Even if they’re “legal,” they might be processing tainted funds.
3. Never respond to unsolicited crypto offers-If someone on Telegram, Instagram, or TikTok promises 10x returns, it’s a scam. Period.
4. Use verified platforms-Stick to U.S.-regulated exchanges like Coinbase or Kraken. They have compliance teams actively blocking these addresses.
5. Report suspicious activity-If you see a crypto scam, report it to the FBI’s IC3 portal. Even a screenshot helps.

This isn’t about paranoia. It’s about awareness. The crypto world is still wild west-but now, the U.S. government is bringing in the lawmen. And they’re not just after the robbers. They’re after everyone who helped them stay in business.