The Karen National Army in Burma faces severe U.S. sanctions after orchestrating a massive $3.5 billion cryptocurrency fraud operation that has victimized countless unsuspecting Americans through social media deception.
Key Takeaways
- The U.S. Treasury has sanctioned the Karen National Army (KNA), a Burmese militia group, for running sophisticated “pig butchering” cryptocurrency scams that target Americans
- Scammers built trust with victims through dating apps and social media before convincing them to invest in fraudulent cryptocurrency schemes
- The Cambodia-based Huione Group laundered over $4 billion in illicit funds between 2021-2025, including proceeds from these scams
- Huione created the USDH stablecoin specifically designed to resist freezing by law enforcement, hampering recovery efforts
- The Treasury has designated Huione a “primary money laundering concern” under the USA PATRIOT Act for also helping North Korean hackers launder stolen funds
Militia Group Running Sophisticated Crypto Scams
The U.S. Treasury Department has taken decisive action against the Karen National Army, a militia group operating in Burma, for orchestrating elaborate cryptocurrency fraud schemes that have defrauded Americans of millions. The sanctions target the group’s widespread involvement in “pig butchering” scams – a particularly insidious form of fraud where scammers cultivate relationships with victims through dating apps and social media platforms before convincing them to invest in fake cryptocurrency projects. The scammers gradually build trust before disappearing with victims’ life savings, leaving devastated Americans with no recourse.
These operations aren’t small-scale – evidence suggests the KNA has been running industrial-scale fraud compounds where workers are forced to conduct these scams on behalf of the militia group. President Trump’s administration has taken a strong stance against these foreign threats targeting American citizens, particularly as cryptocurrency scams continue to proliferate and exploit vulnerable individuals who may not understand the complex technology -behind digital assets.
The Money Laundering Operation Behind the Scenes
At the center of this criminal enterprise sits the Huione Group, a Cambodia-based operation that the Treasury has designated as a “primary money laundering concern” under the USA PATRIOT Act. This designation is one of the most serious financial actions available to the government, reserved for the most egregious offenders threatening our national financial security. According to Treasury investigations, Huione moved a staggering $4 billion in illicit funds between August 2021 and January 2025, demonstrating the industrial scale of these operations targeting Americans.
The Huione Group doesn’t just launder money for the Karen National Army – they’ve also been connected to North Korea’s notorious Lazarus Group hackers, helping them move stolen cryptocurrency through a complex web of financial channels designed to obscure the origin of funds. This connection between rogue militias, hostile nations, and cryptocurrency crime demonstrates why increased regulation of digital assets is essential to protect American interests and prevent our adversaries from exploiting financial technology innovations.
Designed to Evade Law Enforcement
What makes this case particularly troubling is the sophisticated measures these criminal enterprises have implemented to evade American law enforcement. The Financial Crimes Enforcement Network (FinCEN) specifically flagged Huione’s creation of a stablecoin called USDH, which was engineered to be resistant to freezing by authorities. This technology was deliberately created to impede investigators from recovering stolen funds and tracking criminal proceeds, making it significantly harder for victims to recover their losses.
Huione’s operations included multiple business entities like Huione Pay, Huione Crypto, and a black market rebranded as Haowang Guarantee that operates through Telegram. The Treasury’s actions target this entire ecosystem of financial crime, which represents just the tip of the iceberg in the growing threat of cryptocurrency-based financial crimes targeting Americans. The sanctions demonstrate the continuing commitment of the administration to protect Americans from financial predators who exploit technological innovations to circumvent traditional financial safeguards.
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