Thailand Targets USDT Transactions to Combat China-Linked Criminal Networks

Read The Diplomat, Know The Asia-Pacific Bangkok has been evolving toward measures that target the financial infrastructure used by region-spanning criminal networks. On July 12, Bank of Thailand (BOT) Governor Vitai Ratanakorn announced that the BOT would begin auditing high-volume Tether (USDT) transactions. In doing so, he observed that nearly 40 percent of USDT sellers on local platforms were foreign nationals. This decision to scrutinize transactions in USDT, a popular stablecoin, is a part of Thailand’s broader efforts to combat the financial infrastructure that enables the transnational criminal networks operating across Southeast Asia, many of which are linked to Chinese nationals or Mandarin-speaking actors. It suggests that Thai authorities are increasingly intent on disrupting the payment systems that make said criminal ecosystems possible. In its crackdown on transnational crime, Thailand’s approach has for some time been evolving toward infrastructure-level enforcement. In the first few months of 2026, Thailand’s Securities and Exchange Commission filed criminal complaints against offshore digital asset operators serving Thai users without a license, while simultaneously also seeking to block unauthorized platforms from the Thai market. These actions highlight how Thai authorities are increasingly using licensing requirements, exchange oversight, and transaction monitoring to address illicit finance before funds leave the regulated financial systems, increasing consumer protections as a whole. These measures also coincide with recent broader enforcement efforts against gray capital, illicit remittances, and multi-channel money-laundering networks that increasingly rely on both traditional financial institutions and digital assets to move funds across borders. The announcement of audits around USDT is part of a broader response to recent cases involving Chinese-linked actors accused of using digital assets to launder proceeds from criminal activities, including online scams, illegal gambling, and more. These sorts of investigations have taken place repeatedly over the last year. For example, on July 14, Thailand’s Cyber Crime Investigation Bureau announced the arrest of three suspects tied to a Chinese scam syndicate accused of laundering stolen cash into digital assets. Several weeks earlier, Thai authorities issued an arrest warrant for Chinese businessman Wang Yicheng, who has been accused of laundering money from scam operations around the world via digital asset-based financial networks based in both Thailand and China. Last month, Thai police also arrested a Chinese national in Bangkok tied to FINTOCH, a large-scale cryptocurrency investment fraud that purported to be a high-yield crypto investment platform that promised investors “guaranteed daily returns.” In addition to highlighting Thailand’s increasing targeting of the financial infrastructure supporting organized crime perpetuated in the cyber world, these actions also align with the trend of increased USDT usage by Chinese-linked criminal networks around the world over previously-preferred and more volatile digital currencies like Bitcoin. The emphasis on cross-border capital flows suggests that Thai authorities increasingly see enforcement pertaining to digital assets as a regional security issue rather than simply a domestic law enforcement challenge. This is particularly true given the prevalence of scam compounds and quasi-legal/illicit activities in areas in neighboring Myanmar, Cambodia, and Laos, all of which rely on digital assets to move ill-gotten proceeds across borders. As a result, Thailand’s financial system is now an important point of scrutiny in disrupting these wider criminal ecosystems Thailand’s policy response also reflects the broader transformation of organized cybercrime throughout Southeast Asia. In early 2025, The Economist published a series of articles describing the epidemic of crypto-enabled “pig butchering” scams based in Myanmar, Cambodia, and Laos, which that rely heavily on cryptocurrency to collect victim payments, move proceeds across borders, and launder profits. Although many of these operations are located outside Thailand, their proximity and cross-border financial activity have made them a growing concern for Thai authorities. In the backdrop of this increased regulatory oversight is Thailand’s complex relationship with China. Despite the substantial political and economic relationships between China and Thailand, Thai policymakers remain increasingly wary of China’s expanding influence. Thailand’s increased scrutiny of financial crime linked to Chinese-origin actors should not be viewed solely through the lens of bilateral relations with Beijing. In fact, China itself has advocated for the dismantling of these criminal networks, particularly due to Chinese citizens being direct and indirect victims of these crimes, and has put pressure on Thailand to do so. As both a regional financial hub and a close economic partner of China, Thailand’s expanding oversight of digital assets reflects the increasingly delicate balance of protecting its financial system from these aforementioned transnational criminal networks, while still maintaining support for broader regional efforts to combat cross-border financial crime. Thailand’s scrutiny of USDT suggests that the next phase of anti-money-laundering enforcement in Asia will focus on tracing how money moves through digital assets, even if this stops short of banning them outright. The success of the Thai government in this endeavor could potentially become a model for how regulators disrupt scam-linked capital flows, with an emphasis on Chinese-linked criminal networks and their growing operations throughout Southeast Asia. However, Thailand must do so without shutting down legitimate activity tied to digital assets, which are becoming an increasingly important tool for its traditionally financially underserved and unserved populations seeking access to cross-border payments, remittances, and other financial services. Subscribe today and join thousands of diplomats, analysts, policy professionals and business readers who rely on The Diplomat for expert Asia-Pacific coverage. Get unlimited access to in-depth analysis you won't find anywhere else, from South China Sea tensions to ASEAN diplomacy to India-Pakistan relations. More than 5,000 articles a year. Already have an account? Log in. Hugh Harsono is a consultant specializing in emerging technologies, with a distinctive blend of practical implementation, product development, and policy-driven research. Get briefed on the story of the week, and developing stories to watch across the Asia-Pacific.