PHNOM PENH – As the regional crackdown on cross-border telecom fraud reaches a fever pitch, illegal “scam compounds” across Cambodia are facing an unprecedented wave of closures. According to the latest reports monitored by Xingbow, thousands of Chinese and other foreign nationals have poured out of fortified sites in Sihanoukville, Bavet, and Phnom Penh over recent days. With most of their passports confiscated by operators, massive queues have formed outside the Chinese Embassy in the capital, marking the largest surge in consular assistance requests in recent years.
The Catalyst: Extradition of Tycoon Chen Zhi
The primary trigger for this mass exodus is widely considered to be the arrest and formal extradition of Chen Zhi, the founder of Prince Group, to China on January 7, 2026.
- “Skynet” Strike: Chen Zhi, a naturalized Cambodian citizen since 2014, was identified by Chinese authorities as a “notorious leader” of a transnational gambling and fraud network. His fall signifies the Cambodian government’s strategic shift in withdrawing political protection for these illegal hubs under mounting international pressure from the US, UK, and China.
- Compound Collapse: Following Chen’s arrest, at least 10 major compounds—including notorious sites in Sihanoukville and Bavet (BA01, SI15, SI38)—have reportedly begun releasing workers or simply allowing them to flee as operations were abandoned.
Desperation at the Embassy Gates
Since January 14, the streets of Phnom Penh have been flooded with groups of people carrying luggage and, in some cases, office equipment.
- Lost Documentation: The vast majority of those fleeing have had their passports withheld by scam operators. They are now gathering at the Chinese Embassy to apply for “Return Certificates” or emergency travel documents.
- Repatriation Fever: Many escapees expressed a desperate wish to return home before the Lunar New Year (Spring Festival) to surrender to authorities or reunite with families.
- Official Confirmation: Chinese Foreign Ministry spokesperson Guo Jiakun stated on January 19 that China-Cambodia cooperation has achieved “notable results,” with the embassy coordinating closely with local authorities to manage the consular surge.
“We are seeing thousands of people wandering the streets without legal status. While the gates are open, these individuals are extremely vulnerable to being ‘re-trafficked’ into more secretive operations if support systems are not immediately established.” —— Montse Ferrer, Regional Research Director, Amnesty International
Hidden Crisis: Abuse and Potential Re-trafficking
UN and international human rights organizations have warned that the mass release is not purely a victory, as it brings a new humanitarian crisis to the surface:
- Humanitarian Distress: Many escapees show visible signs of torture, including cigarette burns and bruising from electric batons.
- Lack of Support: Thousands are currently stranded without housing or food, wandering in search of safe houses or aid.
- Regional Ripple Effects: The Indonesian Embassy confirmed that 1,440 of its nationals were also released, indicating the industry’s reach across Southeast Asia.
Industry Insight: Rebranding Cambodia
The Cambodian government has pledged to “eliminate” the online fraud industry to restore its international image. However, with the downfall of figures like Chen Zhi and the forced liquidation of Prince Bank on January 8, the financial networks used for money laundering in the region are also facing a systemic collapse.
