FinCEN Orders U.S. Banks to Cut Off Correspondent Banking for Huione Group

FinCEN has directed U.S. financial institutions to terminate correspondent banking relationships with Huione Group, a Cambodia-based network behind several of the world’s largest online scam operations. This move underlines the need for strong correspondent banking controls in stopping global money laundering and cyber fraud.

Huione scams are estimated to have produced over $16.6 billion internationally, primarily through pig-butchering and related investment scams. The U.S. Treasury, in collaboration with OFAC, is targeting the financial networks that finance these global criminal operations.

The following are key steps:

• FinCEN has acted under Section 311, identifying Huione as a primary money laundering risk, denying access to U.S. banks.
• The reported DOJ activity indicated Prince Group utilized more than 100 shell companies and a Bitcoin mining facility in Laos to launder criminal proceeds.
• OFAC has sanctioned 146 individuals and entities, including Cambodia, Hong Kong, Singapore, UAE, and the British Virgin Islands’ Prince Group subsidiaries.

Read More:

• Managing AML Risks in Correspondent Banking Without De-Risking
• Money Laundering Fuels CyberFrauds, says the New UNODC Report
• What is the Financial Crimes Enforcement Network (FinCEN)?

This represents a wider change in how governments tackle financial crime. In a report published last year, the UNODC indicated Southeast Asia as being the hub for pig-butchering scams. The report also indicated the means through which casino money laundering, underground banking, and crypto platforms fund organized crime.

Illicit networks in the area utilize underground banking, cryptocurrencies, and even casinos to launder illegal money. Losses across Cambodia, the Philippines, Indonesia, and Malaysia exceed $37 billion.

Through correspondent banking, FinCEN is sending the message that U.S. banks are the first line of defense against global cyber fraud. Banks connected to high-risk networks like Huione might face regulatory action, reputational risk, and legal action.

With tighter global enforcement, trustable compliance technology comes into its own. AML Watcher helps financial institutions in protecting their system and reputations.