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A room imitating an Australian Federal Police office is pictured inside an abandoned scam centre in O’Smach town on the Thai-Cambodian border on 12 March 2026 (Lillian Suwanrumpha/AFP via Getty Images)
The capacity to reconstitute – often quickly and in new jurisdictions – is a core feature of how these operations function.
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Asia’s scam centre problem is moving on, not shutting downAsia’s scam centre problem is moving on, not shutting down
When Sri Lankan police raided a seaside hotel in Chilaw earlier this month, they detained more than 150 foreign nationals running an online scam operation from inside the building. The raid was a law enforcement success – but it also confirmed what many had feared: the scam economy that has taken root across mainland Southeast Asia is now expanding.
Southeast Asia’s online scam centres – the sprawling operations that traffic workers from dozens of countries and force them to defraud victims worldwide of an estimated $40 billion a year – have since the Covid pandemic become one of the region’s most consequential and least governable crime problems. Sri Lanka’s exposure to the problem is growing fast.
In the first three months of 2026, arrests – including the one in Chilaw – had already exceeded 50%of those reported during all of 2025. If that trend holds, the annual figure could be greater than 600 cases, roughly double that in either 2024 or 2025. And that reflects only what is surfacing through the media: it does not capture what immigration authorities or law enforcement may be seeing, and it almost certainly understates the scale of what is occurring.
This is the emerging pattern as enforcement pressure intensifies in Cambodia. The crackdowns there have been real and significant. In just two weeks in February this year, Cambodian authorities raided 2,709 locations suspected of running online scam operations, identifying more than 21,000 foreign nationals as potential suspects. In parallel, the Cambodian-Chinese operation against Prince Group has escalated: its founder and chairman, Chen Zhi, was arrested in Cambodia on 6 January and swiftly extradited to China to face investigation over large-scale online fraud and related crimes. In October 2025, the US government seized more than US$14 billion in cryptocurrency assets from the Group, followed by nearly $700 million frozen in Hong Kong, Singapore, South Korea, Thailand and Taiwan in November.
Enforcement in one location does not eliminate the networks; it just displaces them.
These are not trivial achievements, yet scam operators have demonstrated consistent capacity to adapt by relocating, restructuring into smaller and more distributed formations, and moving across borders when enforcement pressure builds. The Asia Foundation has been tracking the early signals of this in Sri Lanka’s direction. Over recent months, we’ve seen journalists and commentators closely following the Cambodia situation start referencing Sri Lanka with increasing frequency on social media, noting the movement of groups and individuals out of Southeast Asia. Those references are becoming more common.
Several factors explain why Sri Lanka has become an attractive destination. The country experienced record numbers of tourist arrivals in 2025 and set a goal of 3 million arrivals in 2026. Achieving this means ensuring a tourism strategy that quite rightly promotes a simplified tourist visa regimen. Currently, citizens of China, India, Russia, Thailand, Indonesia, Malaysia, and Japan can enter on free tourist visas, and the government is considering extending this scheme to 39 more countries. Thirty-day tourist visas issued on arrival can be extended for up to six months. This openness, which is economically critical for tourism purposes, also lowers barriers for groups that wish to move people across borders quickly.
The physical infrastructure is already in place. Hotels, guesthouses and apartments across the island provide a usable operating environment for the smaller, more mobile model that has been displacing the large, fixed compounds of the earlier period in Cambodia and Myanmar. Strong digital connectivity means that operational requirements can be met from most parts of the island. Mobility is now a deliberate operational advantage: smaller groups can disperse when they anticipate enforcement activity, reducing their exposure in ways that large compounds never could.
Sri Lanka’s exposure to the problem is growing fast (Science Photo Library/Getty Images)
Meanwhile, these “new” types of crimes are challenging enforcement and legal systems. Sri Lanka has relevant legislation – provisions in the penal code addressing trafficking, the Computer Crimes Act, a recent Personal Data Protection Act – but these instruments do not yet adequately address the specific crimes associated with scam centre operations. “Pig butchering” schemes (long-term cons in which the perpetrator builds a romantic relationship with the victim to defraud them) and cryptocurrency-related investment fraud that targets victims overseas, for instance, are not well captured by existing statutes. While a new cybercrime investigation bureau has been established within the police, and authorities are seeking to strengthen mechanisms to prosecute operators of illegal scam centres, the predominant response thus far has been deportation rather than prosecution.
In another recent case, Sri Lankan police detained 134 individuals in Anuradhapura, a semi-urban city in the north-central province, demonstrating that operations are also extending further inland and into less conspicuous locations – areas where community tip-offs are harder to generate and specialist response capability is thinner. This points to a problem that no single country's enforcement efforts can resolve. When Myanmar's military was compelled to act against compounds in Myawaddy district, many operators and workers either fled across the border, and several centres soon resumed activity elsewhere in the district. Enforcement in one location does not eliminate the networks; it just displaces them. The capacity to reconstitute – often quickly, often in new jurisdictions – is a core feature of how these operations function.
The Chilaw raid suggests that Sri Lanka is confronting the scam centre economy at an early stage. The numbers are still relatively small and the operations still fragmented. But the conditions that initially made Cambodia and Myanmar attractive to scammers – accessible entry, infrastructure, connectivity and enforcement gaps – exist in Sri Lanka. Elsewhere in the region, stronger coordination, legal tightening, and deeper international cooperation have not eliminated scam networks, but they have raised costs and reduced the space in which they operate. Whether Sri Lanka remains a temporary waypoint or becomes a more stable node in this economy will hinge on how quickly similar gaps are addressed.
About the authors
Nicola Nixon
Dr Nicola Nixon is the Senior Director of Governance at The Asia Foundation.
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