A spate of recent frauds has shown how the rapid adoption of artificial intelligence (“AI”) is lowering the barriers to entry for financial criminals, and how the spread of cryptocurrency usage is easing money laundering and the movement of stolen funds.

The use of these technologies is resulting in a major surge in financial crime, and governments are struggling to respond to the scale and speed of the changes now under way. As such, companies cannot solely rely on official actions, but rather need to help themselves – or risk debilitating losses.

SVA can assist businesses in protecting their interests. SVA provides fraud and corporate investigation, asset tracing, and risk mitigation consulting services, and has a wealth of experience in responding to financial crime.

Playing Whack-a-Mole

A series of successful crackdowns by law enforcement authorities in Hong Kong, the People’s Republic of China (“PRC”), and Cambodia in recent months have resulted in the arrest of hundreds of scammers – and drawn attention to a region-wide surge in technology-enabled financial crime.

Of particular note was the arrest and extradition from Cambodia to China of notorious fraudster Vincent Chen Zhi (陈志) on 8 January 2026, for a wide range of economic offences. That arrest came despite earlier requests for his extradition to the US, issued in October 2025.

Chen Zhi’s Prince Group had come under investigation in jurisdictions as varied as the US, UK, Singapore, Hong Kong and the PRC, owing to the conglomerate’s role in international financial scams, and associated money laundering activities.

“Pig butchering”

Sadly, the Prince Group is but one of many groups involved in what have become known as “pig butchering” scams. Major groups running such frauds have sprung up of late across Southeast Asia, especially in weakly governed locations such as Cambodia, and on the border between Thailand and Myanmar, where a civil war is under way.

The “pig butchering” scams involve tricking victims (the pigs) into fake online relationships, before steering them into bogus investments, and seizing their funds (the butchering). The stolen funds are often moved through cryptocurrency. These scams recall classic “boiler rooms”.

The enterprises are almost industrial in scale. The Cambodian authorities on 31 January 2026 arrested more than 2,000 individuals for carrying out online scams, of whom more than 1,700 came from the PRC, while the Hong Kong Police Force’s Cybercrimes Unit announced the breaking up of a gang of online romance scammers on 3 February 2026.

For all of this enforcement action, though, the scale of the task is huge. Such measures have done little to stamp out what is clearly a rapidly growing threat.

A lot at stake

The scale of the frauds is also immense. With regard to Chen Zhi’s Prince Group alone, investigations revealed a criminal network involved in fraud, forgery, money laundering, and forced labour, operating across the US, UK, the PRC, Cambodia, Pulau, and Singapore, amongst other jurisdictions.

Seizures of assets by law enforcement amounted to perhaps USD14 billion in Bitcoin (the use of which is front-and-centre in such scams), 19 properties in London worth more than GBP40 million, HKD2.75 billion in cash in Hong Kong, and some SGD150 million in luxury cars, a yacht, and properties in Singapore.

Working out what came from where, and who will get what, will take considerable time.

New Technology is enabling fraud

Such cases have neatly illustrated how AI and related technologies are empowering criminals.

One problem, for instance, is that AI tools assist those criminals wishing to pose as potential partners, trusted vendors, or senior executives – by helping to generate means to manipulate internal approvals, infiltrate supply chains, and orchestrate complex investment or invoice fraud.

Extremely realistic forgeries are another concern. AI tools allow for the quick and easy generation of fake documents, of a quality that readily meets most customer or bank due diligence standards.

Contemporary AI forgery uses generative adversarial networks and diffusion models that can replicate security features such as holograms, microprinting, and the subtle wear-and-tear patterns of legitimate documents.

AI also facilitates the creation of “synthetic identities”, which are fabricated personas featuring consistent and falsified documentation across education, employment, and financial records. Unlike stolen identities, these synthetic identities lack the traditional indicators of fraud, making them much harder to spot.

AI technologies are also spreading rapidly. Dark web marketplaces have long offered fraud-as-a-service platforms, providing complete document sets using stolen personal information (such as passports, bank statements, or IDs) in minutes. Now, though, the ready availability of AI tools means that fraudsters can produce such high-grade documents from their kitchen tables.

The scale of the change under way is starting to show in statistics. A 116% year-on-year increase in fraud cases was visible in the Asia Pacific financial technology sector in the first quarter of 2025, for instance. The region also recorded a 233% increase in document fraud, with Hong Kong alone seeing a 1,900% year-on-year surge in deepfake fraud cases in 2025.

Law enforcement is largely floundering in response. Notwithstanding the arrests outlined above, SVA has seen a rapid rise in cases involving the use of AI to circumvent protections, forge identities, and defraud victims.

Sadly, and as ever, those targeted are often vulnerable, and unfamiliar with the technology in question; in one of SVA’s cases, the fraudsters even stole the funds for an aged victim’s pacemaker.

All told, AI and crypto appears to be ushering in a massive, new surge in frauds.

Cryptocurrency and laundering

Also striking is how criminal networks increasingly rely on barely regulated cryptocurrency markets to launder money, and to move illicit funds across borders.

The use of cryptocurrency has been a repeated theme in SVA’s recent investigations. For one thing, the pseudonymous nature of wallet addresses presents acute tracing challenges, notwithstanding blockchain technology providing a public ledger.

For another, taking funds out of the cryptocurrency market onto non-custodial wallets easily hides onward movement of funds – although custodial wallets, held by official exchanges, are somewhat easier to track.

A related, if largely unspoken, problem is that even legitimate exchanges may turn a blind eye to happenings on their platforms, for fear of deterring business, or to avoid admitting to compliance shortfalls.

Again, some statistics reveal the scale and speed of the change. Global illicit cryptocurrency flows reportedly surged 145% in 2025 on 2024, to a record (if probably understated) USD158 billion.

No doubt, such flows will grow faster and further in 2026.

Politicised regulation

As if this were not enough, the increasingly distrustful geopolitical environment is complicating enforcement. After all, financial crime networks continue to operate freely across borders, uninhibited by the retreat from globalisation now under way – in contrast to law-abiding companies.

The broadening unwillingness to cooperate means that criminals can easily play a “game of jurisdictions”. Law enforcement liaison between Hong Kong and the US, Japan, and some European states, for instance, fell into abeyance after the 2019 protests, with the authorities on each side deeply reticent about sharing information – much to the delight of fraudsters.

In other jurisdictions, those officials seeking to respond in good faith can prove lethargic, or unsteady, perhaps owing to limited understanding of the technology, the inadequacy of resources, or simply because the funds have moved quickly out of the jurisdiction. The best will in the world is not enough in the face of such substantive change.

Finally, old-fashioned tricks, such as the use of economic citizenship programs, only add to the problem. The “Fujian Gang”, for instance, a group of fraudsters who operated illicit online gaming operations in Singapore, held a motley collection of foreign passports – from Cyprus, Vanuatu and Cambodia, amongst others.

The use of such a multiplicity of documents can make extradition, already burdensome, an even more complex and frustrating process.

Act now

The spate of recent frauds has shown, then, how the rapid adoption of AI is lowering the barriers to entry for financial criminals, and how the spread of cryptocurrency usage is easing money laundering and the movement of illicit funds.

Moreover, the use of these technologies is gathering momentum, resulting in a major surge in financial crime. Governments are struggling to respond to the scale and speed of the changes now under way, meaning companies cannot rely on official action, but need to help themselves – or risk debilitating losses.

SVA can assist businesses in protecting their interests. SVA provides fraud and corporate investigation, asset tracing, and risk mitigation consulting services, and has a wealth of experience in responding to financial crime and across borders.

SVA

SVA has a great deal of experience in responding to incidents of financial crime, investigating frauds, and in tracing and recovering assets internationally. If we can be of any assistance to your organisation in dealing with these complicated issues, please do not hesitate to contact us at the numbers below.

SVA (www.stevevickersassociates.com) is a specialist risk mitigation, corporate intelligence and risk consulting company. The firm serves financial institutions, private equity funds, corporations, high net-worth individuals and insurance companies and underwriters around the world.

Key services include: corporate investigations; fraud investigations; and asset searching inquiries.