Myanmar’s military administration has proposed sweeping new penalties for those running online scam operations, including crypto fraud, as part of a draft “Anti-Online Scam Bill” that would introduce the death penalty in some cases and life sentences in others.
Key penalties and provisions
The proposed law would:
- Impose the death penalty on people who use violence or coercion to force others to carry out online scams.
- Allow life imprisonment for those who operate scam centers, including crypto-related fraud hubs.
- Criminalize torture, unlawful detention and other forms of abuse linked to the running of these centers.
A new national committee would be established to coordinate with foreign authorities against transnational cyber fraud, signaling a more formal framework for cross‑border cooperation.
The junta-controlled legislature is expected to review the bill in early June.
Response to cross-border scam compounds
The legislation follows growing international scrutiny of compounds in Myanmar’s border regions, where trafficked workers are allegedly forced, under threat and violence, to run online investment and crypto fraud schemes targeting users overseas.
These compounds have become a focal point of global concern as they blend cyber fraud with human trafficking, debt bondage and physical abuse.
Rising international pressure
The move comes amid increasing pressure from foreign governments, particularly the United States, to crack down on Southeast Asian scam networks:
- In September 2025, the U.S. Treasury sanctioned 19 entities tied to crypto investment scams:
- 9 in Myanmar’s Shwe Kokko zone
- 10 in Cambodia
- More recently, a U.S. scam center strike force announced a broad campaign against these operations:
- Sanctions were imposed on a prominent Cambodian senator and 28 other entities.
- Criminal charges were filed against two Chinese nationals accused of managing a fraudulent investment compound in Myanmar.
- Authorities seized 503 fake investment websites.
- Over $700 million in cryptocurrency believed to be linked to laundering scam proceeds was restrained.
Scale of crypto-related losses
The enforcement push is driven by the soaring financial toll of online fraud, particularly crypto-linked schemes.
According to the FBI’s 2025 internet crime report:
- Total reported losses from internet crime in the United States neared $21 billion.
- Cryptocurrency-related fraud accounted for more than half, with losses of more than $11.3 billion.
- Investment fraud was the costliest category.
- The average loss per victim in a crypto-related case reached $62,604.
- So‑called “pig butchering” schemes, in which criminals build long-term trust before directing targets to fake investment platforms, were responsible for around $7.2 billion in losses.
Older victims were hit especially hard, with reported losses of $4.4 billion, a sharp increase from the prior year.
Impact on digital markets and scam operations
For traders and other participants in digital markets, these actions mark a more hostile environment for industrial-scale fraud rings:
- Governments in Asia and North America are moving in tandem to disrupt infrastructure used for large scam operations.
- The combination of Myanmar’s severe proposed penalties and stepped-up U.S. sanctions, asset seizures and criminal cases suggests that cross-border enforcement coordination is intensifying.
- Global platforms used for fraud, including recruitment channels and fake trading sites, are facing higher shutdown and seizure risks.
Human trafficking at the center of enforcement
Underlying the legislative push is the human cost of these scams:
- Many scam centers reportedly depend on trafficked individuals forced to defraud others under threats of violence.
- The U.S. strike force seized a Telegram channel used to recruit victims into these compounds, underscoring how financial crime, human trafficking and forced labor are intertwined.
- Myanmar’s proposed use of capital punishment specifically targets operators who rely on coercion and abuse, framing the bill as both an anti-fraud and anti-trafficking measure.
The bill’s progress in Myanmar’s legislature and the outcome of ongoing U.S. enforcement campaigns are likely to shape the risk landscape for online fraud and crypto-related crime across the region.
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