The Cryptocurrency Black Market Behind Myanmar's Industrial Park: On-Chain Tracking of $100 Million Flows

In Myeik, Myanmar, there is a notorious “production base”—located within a Myanmar industrial park—where thousands of trafficked victims are forced to participate in scam activities. This massive underground industry not only plunders wealth from victims through fake investment schemes but also exerts further financial pressure on their families by demanding ransom payments. Most shocking is that all these criminal activities are closely linked to cryptocurrency.

The Nightmare of the Enclosed: The Truth Behind Operations in Myanmar Industrial Parks

The so-called “pig-butchering” scams are essentially manipulative schemes that use fabricated romantic relationships to lure victims into investing. Scammers establish fake identities via social media and dating apps, pretending to be lovers or friends, gradually guiding victims to invest funds into fictitious projects. According to FBI data from 2022, just this type of scam caused over $700 million in losses in the US, while total losses from all cryptocurrency investment scams approached $2.5 billion.

But the real victims are not only those deceived; many scammers themselves are also victims. In places like Myanmar industrial parks, trafficked individuals are held in detention-like facilities. Data from on-site investigations conducted in cooperation with the International Justice Mission (IJM) show that these people are forced to work 12 hours or more daily; those who fail to meet scam targets are beaten, tortured, or even deprived of food as punishment.

The Dark Side of the Industry Chain: From the Park to Ransom

Within Myanmar industrial parks, the criminal industry chain is highly developed. Typically, one company owns land and buildings, which are then subleased to other criminal groups—the actual operators of the “pig-butchering” scams. Park owners not only rent out the premises but also dispatch armed bodyguards to prevent trafficked individuals from escaping.

The scam groups generate revenue through two channels: one is directly from the scam amounts extracted from victims, and the other is from ransom demands on victims’ families. Scammers threaten the families of trapped individuals to pay ransom for their release, often paid in cryptocurrency. On-chain analysis shows that scam proceeds and ransom payments are mixed on the blockchain, forming a complex flow of funds.

Chain On-Chain Evidence from KK Park: Nearly $100 Million in Digital Footprints

Located in Myeik, Myanmar, KK Park is one of Southeast Asia’s largest scam hubs, reportedly holding over 2,000 trafficked persons. Through blockchain data tracking, Chainalysis and IJM obtained two ransom addresses associated with a scam group inside the park.

The activity scale of these two addresses is astonishing. Since becoming active in July 2022, these addresses have received nearly $100 million in cryptocurrency. One ransom address alone received about $24.2 million from four known scam-related wallets. Both addresses have frequent inflows and outflows with major crypto exchanges, many of which are likely ransom payments.

Notably, these ransom addresses are not only used to receive ransom payments from families but also serve as intermediaries for scam funds. On-chain footprints show that scam activities and extortion are tightly intertwined at the technical level—same addresses receive both scam proceeds and ransom payments—indicating that criminals in Myanmar have established a complete money laundering pipeline.

Considering that these are just two addresses of a single scam group within KK Park, the overall scale of scams in the area is likely much larger. Tracking reveals that most of the $100 million in transactions occurred on the Tron blockchain, known for its extremely low transaction fees, making it the preferred platform for such illegal activities.

Countermeasures in the Crypto Ecosystem: Freezing and Arrests

In response to this escalating threat, the crypto ecosystem has begun to take action. In November 2022, stablecoin issuer Tether and exchange OKX announced cooperation with the U.S. Department of Justice to jointly investigate the flow of funds related to Southeast Asian scam groups. Tether immediately froze approximately $225 million in USDT tokens linked to these activities.

According to data, since Tether opened its platform to U.S. law enforcement agencies like the FBI, nearly 1,300 crypto wallets have been blacklisted, with the scale of freezes continuously expanding. By the end of 2023, a large-scale operation led by Interpol, primarily involving South Korea, arrested 3,500 individuals involved in online scams and confiscated $300 million in funds, including $100 million in crypto assets.

Industry Responsibility and Future Challenges

Chainalysis urges all crypto companies to actively track on-chain activities related to scams and proactively report suspicious fund flows to law enforcement. As the exposure of criminal industries like Myanmar parks increases, the crypto industry is gradually establishing more comprehensive anti-fraud mechanisms.

However, challenges remain. The long-term existence of places like Myanmar parks is partly due to local political instability providing shelter for criminal groups. Technologically, the low-cost features of blockchain are being exploited by black markets—platforms like Tron, with their minimal transaction fees, have become the best channels for illegal fund transfers. Only through joint international law enforcement efforts, proactive regulation by crypto exchanges, and industry-wide cooperation can the expansion of dark industries like Myanmar parks be effectively curbed.