U.S. Sanctions Myanmar Militia for $5.5 Billion Crypto Scams

The U.S. Treasury Department has announced sanctions against the Karen National Army (KNA), a militia group in Myanmar, for its involvement in crypto scams and fraud. The sanctions specifically target KNA leader Saw Chit Thu and his two sons, Saw Htoo Eh Moo and Saw Chit Chit, due to their central roles in these illegal activities. The U.S. government has expressed its determination to dismantle these criminal operations and prosecute all perpetrators to the fullest extent of the law.

The Department of Justice revealed that KNA leaders are involved in “pig butchering” operations, a form of digital fraud where scammers establish relationships with their victims over months, directing them into fraudulent crypto investment schemes. American citizens have been swindled out of billions of dollars from scams originating from Myanmar-based networks. The announcement highlighted the severity of the issue but did not provide specific loss figures.

The KNA controls an area that straddles Myanmar and Thailand, serving as a central point for executing numerous scam operations. U.S. officials indicate that the group leverages its military alliances in Myanmar to undertake broader criminal ventures. Despite adopting a new name, the organization has maintained its military relations.

Deputy Treasury Secretary Michael Faulkender emphasized that cyber scams operated by KNA criminals result in billions of dollars in stolen gains at the expense of victims’ financial losses. The U.S. government remains dedicated to breaking down these illicit operations and prosecuting the responsible parties.

This recent action follows previous Southeast Asian anti-scam network operations by the U.S. government. The U.S. Financial Crimes Enforcement Network (FinCEN) previously revealed Huione Group from Cambodia as a vital institution responsible for processing funds obtained through cyber fraud. Sanctions against Cambodian businessman Ly Yong Phat and his companies were applied in both 2023 and 2024 due to their connection to human rights violations at scam facilities.

Cyber scams originating from Southeast Asia have become a growing concern, with traffickers using deceptive tactics and threats of violence to maintain deception. Scam operations exist in casinos, hotels, and protected compounds. Cryptocurrency scammers dupe victims into thinking their investments will turn a profit before vanishing with their funds. American victims lost $2 billion in 2022 and $3.5 billion in 2023 to these scams.

The KNA supports these illegal activities through revenue streams from land leasing to criminals, providing security services for scams, and supporting human trafficking. Testimonies from survivors of a major scam center revealed the presence of KNA soldiers performing security duties at the compound.

The United States has placed economic sanctions on KNA and its leaders, freezing all their assets connected to American entities. The U.S. government prohibits its citizens from conducting business operations with these groups. Any business entity that receives more than 50% of its ownership from sanctioned individuals becomes subject to blocking restrictions.

Both doing business with KNA members and providing assistance to the organization can trigger penalties, according to U.S. Treasury warnings. These measures fulfill government objectives by delivering criminal punishment, protecting victims, and implementing financial protection measures for the future.