UN agency recommends Southeast Asian countries make unlicensed virtual assets illegal to combat cybercrime

In a new report released on Monday, the United Nations Office on Drugs and Crime Control (UNODC) called on Southeast Asian countries to review and strengthen the licensing system and enforcement framework for the money services industry and virtual asset service providers (VASPs), and will not engage in related activities without a license ( including cryptocurrency exchanges).

UNODC has released a report on the use of new technologies by criminal activity in Southeast Asia, finding that Asian criminal groups have integrated new service-based business models and technologies into their operations, including malware, generative artificial intelligence and deepfakes , while building new underground markets and cryptocurrency solutions for their money laundering needs.

UNODC said some virtual asset servicers, including those with ties to known criminals, were facilitating transactions for fraud syndicates and high-risk gambling sites. According to the report, an unknown entity was involved in "at least hundreds of millions of dollars" in transactions related to criminal activity, including groups associated with or directly involved in large-scale drug trafficking, human trafficking, cybercrime and child sexual exploitation, as well as U.S. Office of Foreign Assets Control (OFAC) sanctioned entities and wallets linked to North Korea’s Lazarus Group.

Masood Karimipour, regional representative of the United Nations Office on Drugs and Crime Control, said in a statement: "Governments need to take the seriousness, scale and scope of this truly global threat more seriously than ever before and prioritize responses to the rapidly evolving situation in the region. Solutions to the criminal ecology.”

The agency also recommends increased monitoring of organized crime involving casinos, junkets, online fraud operations and other fraud-related commercial activities, and better training of relevant authorities on how to use advanced technologies, especially cryptocurrencies. Online gambling operations and money laundering techniques.

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