Southeast Asia's Electric Fraud and Slave Labor Trafficking Industry: Crypto Assets Pressure Vehicle Trading Guarantee Platform

Written by: Bitrace

The cryptocurrency trading guarantee platform is primarily a matching and intermediary platform that provides trading guarantee services for the black and gray markets in Southeast Asia. Its target clients include entities related to illegal activities such as money laundering, payment, document checking, smuggling, and gambling, and it has become a powerful tool for cybercrime groups.

In addition to these common types of crimes, some trading guarantee platforms engage in human trafficking activities under the guise of "overseas labor." This article aims to disclose the development trends of this anti-human crime industry and analyze its business scale and financial pollution based on cryptocurrency.

Southeast Asia electric fraud slave labor trade

Southeast Asian telecom fraud groups need to recruit employees of corresponding nationalities based on the targeted fraud demographic. For example, in the case of the "Pig Butchering Scam" targeting the Chinese community, a large number of young Chinese people cross the border through legal or illegal channels each year to work in telecom fraud zones.

A certain public group merchant is sharing how to deceive/kidnap young Chinese men.

These young people are often deceived and forced into Southeast Asia, and by the time they realize they have been sold into the electric fraud industrial park as slave labor, it is often too late for them to escape.

Population prices by age group (in USDT)

Typically, young men aged 20-30 are the most popular "products" that can fetch higher prices, while those under 20 or over 35 are considered "scraps," either priced lower or requiring stricter assessments. Women are almost entirely outside the trading scope.

The actor Wang Xing, who previously caused a huge public uproar in mainland China due to his kidnapping case, was sold to a telecom fraud park through this channel.

Strong Pressure Vehicle Trading Guarantee Service

In terms of conventional black and gray market material transactions, the business logic of the transaction guarantee platform is similar to that of e-commerce platforms like Amazon and Taobao. Merchants need to pay a deposit to the platform before they can start their business, and the total amount of business conducted at the same time cannot exceed the deposit limit. If a merchant is unable to provide valid services or goods for reasons related to themselves, the buyer has the right to apply for platform arbitration and even receive compensation from the deposit. Through this model, the transaction guarantee platform establishes trust between both parties in illegal transactions.

Navigational Guarantee Special Group Strong Pressure Vehicle Guarantee Trading Rules

In terms of human trafficking, the basic pattern is also consistent. When humans are the target of trade, such merchants are referred to as "labor transaction guarantors." However, due to the potential for unwilling victims to escape (literally), report to the police, or refuse to cooperate at any time, some merchants may resort to intimidation, coercion, and violence during transportation. Those who provide these additional services are referred to as "coercive transaction guarantors."

Strong pressure, industry jargon, refers to kidnapping here.

Huiwang Group's Potato Guarantee emphasizes "bottom line"

Due to the efforts of law enforcement agencies worldwide to combat transnational human trafficking crimes, the vast majority of guarantee trading platforms refuse to provide transaction guarantee services for illegal human trafficking transactions. Even Tudou Guarantee, the leading guarantee trading platform under the Cambodian Huiwang Group, emphasizes the "bottom line of humanity" and claims it will not participate, highlighting the severity of such operations.

Navigation Guarantee Special Group Pledge Address Analysis

Navi Guarantee is the only one among the top ten trading guarantee platforms in Southeast Asia that operates both "Overseas Labor" public groups and private groups, and explicitly states that it provides guarantee services for "high-pressure vehicle transactions."

Official Announcement of the Navigation Guarantee Channel

The pinned announcement on its official Telegram channel mentioned that "Strong Pressure Car Guarantee Merchants" under Navigator Guarantee need to submit deposits through the designated address in the special group, indicating that the counterparties of the disclosed addresses are all affiliated with entities related to the Southeast Asian transnational human trafficking industry.

As a result, Bitrace's investigators were able to conduct blockchain analysis.

Data from the Bitrace Pro survey tool

The latest dedicated deposit address for Navigator Guarantee will be activated on February 23, 2025, and in less than 5 months thereafter, a total of 100,748,05.56 USDT has flowed in, worth over 100 million dollars.

It is worth noting that this batch of funds is merely a deposit submitted by merchants operating only the "Strong Pressure Car Guarantee" business under the banner of Linghang Guarantee to a dedicated group address. Within the scope of the deposit, merchants can repeatedly conduct business, and the actual amount of funds related to transnational human trafficking in Southeast Asia far exceeds this figure.

Analysis of Capital Pollution in Slave Trade

By analyzing the funds of the counterparties of the navigator guarantee special group address, Bitrace investigators attempt to assess the situation of the centralized trading platform being exploited.

Data from the Bitrace Pro survey tool.

The source of funds direction shows that the two exchanges transferred a total of 72,418 USDT in 18 transactions to the audited entity. The implication of these transactions is that the navigator guarantee merchants directly used the exchange address to pay a deposit to the navigator guarantee, and these deposits were used to secure their human trafficking business.

In terms of fund withdrawals, 262 user addresses from four exchanges received a total of 414 transactions amounting to 1,689,730 USDT from the audited subjects. The implication of these transactions is that the guarantor merchants of the platform directly transferred the deposits refunded by the platform into the exchange accounts after ceasing operations.

The image is taken from the Bitrace Pro investigation tool.

These four exchanges are all of Chinese background, and their main user groups are Chinese-speaking users, which aligns with the business of the leading guarantee special group merchants mainly selling Chinese people to Southeast Asian telecom fraud parks.

Among them, OKX, as one of the leading centralized cryptocurrency exchanges globally, has been at the forefront of this process, being heavily utilized for deposit payments and the storage of criminal funds. 17.3% of the withdrawal activities from the dedicated guarantee group's deposit addresses pointed to 236 OKX user addresses.

guaranteed fund threat

Illegal trading guarantee platforms are often combined with anonymous social software and on-chain money laundering, posing a continuous and hidden financial threat to crypto institutions.

Taking the most commonly used social software Telegram APP as an example, although many public group merchants will publicly disclose their business content and business address in the channel, the truly dangerous illegal transactions are often hidden in non-public special groups or VIP groups, making them difficult to detect.

Frequent changes in business addresses also pose challenges for continuous monitoring. Apart from major trading guarantee platforms that maintain relatively stable rotations of business addresses, other small and medium-sized guarantee platforms experience a significant amount of mixed usage of business addresses, irregular replacements, and overlapping business functions, which requires quick awareness from risk control personnel.

As a result, not only do illegal trading guarantee platforms for cryptocurrencies pose a financial threat to centralized entities such as exchanges, but also the related funds from organized crimes such as online gambling, money laundering, and fraud.

Written at the end

The fight against transnational human trafficking criminal entities in Southeast Asia relies not only on the law enforcement activities of law enforcement agencies from various countries and regions around the world but also requires the voluntary cooperation of operators in the cryptocurrency industry infrastructure—Cex, OTC, Crypto Payment, etc.

Bitrace has maintained close cooperation with law enforcement agencies and regulatory bodies in various parts of Asia for a long time, deeply participating in the tracking and analysis of over a thousand virtual asset-related cases. In this process, it has accumulated rich practical experience and high-value risk data. Based on this, Bitrace has built a high-quality risk address database covering over 20 mainstream and emerging public chains, and combined with its self-developed AI models and large language model technology, it continuously optimizes risk labeling, fund path identification, and address clustering capabilities, enabling quick perception and intelligent analysis of complex on-chain money laundering and criminal activities.

Through Bitrace Pro, Bitrace Blacklist, and Bitrace AML tools, Bitrace can effectively meet the different needs of financial institutions, providing operators and risk control personnel with a compliant experience.