The Financial Action Task Force (FATF), the global anti-money laundering watchdog, has released a new study that traces the money behind scam compounds.
These industrialised fraud operations are thought to drain tens of billions of dollars from victims each year, and the report sets out a fresh set of principles designed to dismantle them.
The report, titled Combating End-to-End Illicit Financial Flows linked to Scam Compounds, finds scam compound activity across Africa, Europe, the Americas and Asia. It charts the payment services, virtual assets, technology and telecommunications channels these networks rely on, with the aim of helping authorities intervene both before and after victims hand over money.
The harm runs in two directions. Individuals from at least 80 jurisdictions have been found inside Southeast Asian compounds, and around 120,000 people are believed to be coerced into running online fraud in Myanmar alone. Many are lured by fake job offers, moved across borders and held through debt bondage, confinement, violence and abuse.
At the other end, people in more than 100 jurisdictions have been targeted, often losing funds permanently once the money is withdrawn, shifted overseas or converted into virtual assets. In one investigation, blockchain tracing linked over $100m in victim payments to a single wallet cluster tied to a compound.
Operators launder proceeds through cash, mule accounts, informal transfer services and, above all, virtual assets, with some compounds running in-house over-the-counter exchange desks.
Instant payment systems can empty a victim’s account within roughly two minutes, while AI-generated content, deepfakes and automation are cutting costs and making fraud harder to spot. Enforcement pressure has also pushed groups into smaller, mobile setups operating from casinos, rented flats, cafés and even vehicles.
The FATF observes that countries currently perform better at downstream measures, such as tracing assets and pursuing proceeds, than at upstream disruption. It urges authorities to act on early warning signs including fake advertising, recruitment drives, malicious domains and suspicious telecoms activity.
Its new principles call for targeting criminal leadership and trafficking networks, disrupting financial flows from start to finish, sharing intelligence across banks, tech firms, telecoms operators and authorities, and moving quickly across borders, since the first 24 to 72 hours after detection are decisive for freezing funds. The principles also prioritise victim protection and continual adaptation as networks relocate and rebrand.
Described as the first step in a wider FATF anti-fraud roadmap, the report draws on almost 120 case studies from more than 60 jurisdictions. A US Scam Center Strike Force operation disrupted about 1.4 million accounts and froze over $3.8m in virtual assets.
Indonesia’s Anti-Scam Centre blocked more than 515,000 accounts and returned around $10.9m to victims between November 2024 and May 2026. In the UK, the Scam Signals service, covering 85% of mobile users, has been linked to a 41% fall in people scammed and a 44% drop in fraud losses.
FATF president Giles Thomson said, “With criminals weaponising AI and other technologies to intensify their scam operations, we need to urgently modernise and accelerate our response. This means focusing on dismantling the criminal networks behind scam compounds, working proactively with technology, social media and communications sectors to prevent and disrupt more scams before they happen, and quicker intervention to freeze and seize the proceeds of scams once they’ve happened.”
Copyright © 2026 RegTech Analyst
Copyright © 2026 RegTech Analyst
