The US government’s announcement on May 5, 2025, of sanctions on Saw Chit Thu, the commander of the Karen National Army (BGF), later known as the Karen National Army (KNA), and his two sons for supporting cyber fraud, human trafficking, and cross-border crimes, was not only because these crimes affected American citizens, but also because they served to maintain the US’s role in the civil war in Burma, to compete strategically and geopolitically with China, and the sanctions also affected the region as a whole.

The US Treasury Department justified its handling of Saw Chit Thu by stating that cybercrime targeting US citizens and people around the world originated in Southeast Asia, and that the US has been taking action on this issue continuously. Previously, on May 1, 2025, the US Treasury Department’s Financial Crimes Watchdog (FinCEN) announced that the Cambodian-based financial group Huione Listed as a money laundering concern under Section 311 of the USA PATRIOT Act

Huione Group is a money laundering network of North Korean cybercrime and other transnational criminal organizations in Southeast Asia involved in cryptocurrency (CVC) investment scams, commonly known as ‘pig butchering’ and other CVC-based scams.

Earlier in September 2024, the U.S. Office of Foreign Assets Control announced sanctions on Cambodian businessman Ly Yong Phat, his L.Y.P. Group business, and four of his real estate properties for their involvement in serious human rights violations, particularly the exploitation of human trafficking victims in cyber fraud centers located in Cambodia.

In September 2023, FinCEN also issued an alert on cryptocurrency investment fraud, urging financial institutions and relevant agencies to be aware of potential risks in the international financial system.

U.S. Treasury Department In 2022, Americans were estimated to have lost more than $2 billion to these scams, and in 2023, the losses will rise to more than $3.5 billion. The main sources of these operations are Burma, Cambodia, and other Southeast Asian countries.

According to the US, the Karen State area in Burma, which borders Thailand, is a major hotbed for cyber fraud and various illegal businesses, and the name of Zaw Chit Thu has emerged as the center of the scam economy for some time now.

Zaw Chit Thu, often known in Thailand as Maung Chit Thu, is considered a major warlord in the land of the unfaithful. He began his life as a fighter with the Karen National Union (KNU), a close aide to General Tin Maung, commander of the 7th Division, before splitting off to join the Democratic Karen Buddhist Army (DKBA), which later changed its name to The Democratic Karen Benevolent Army (DKBA) in 1994 and became the commander of Battalion 999, which played a key role in leading the KNU’s offensive against the Komula camp in 1998.

Chit Thu led his troops to join the Border Guard Force (BGF) under the Tatmadaw in 2010, before being rewarded with a position near the Thai border and starting to build an economy that would sustain his empire by establishing Chit Lin Myaing, a company that deals in cars and lumber in the area.

The turning point that made Chit Thu famous in the United States came in 2017, when he teamed up with Chinese tycoon She Zhijing to build the Yatai New City project in Shwe Kokko.

In 2024, Chit Thu announced his separation from the Tatmadaw. No longer a border guard force, it established its own Karen National Army (KNA) (although some sources insist that Chit Thu has not actually cut ties with the Tatmadaw, but rather remains a military ally to act as a counterbalance to the KNA).

The KNA has made significant economic gains from its cyber fraud operations by leasing land in areas it controls to other criminal groups, as well as supporting human trafficking, smuggling, and providing utilities such as power to the fraud centers. The KNA has also deployed personnel to provide security for other fraud centers or sin towns in Karen State. Thai military intelligence says Chit Thu plays a key role in allocating benefits to various armed groups in areas of Karen State near Myawaddy-Mae Sot.

The UK government previously sanctioned Zaw Chit Thu in 2023, and the European Union imposed additional sanctions in 2024 over his role in the cybercrime center and his links to Min Aung Hlaing’s State Administration Council (SAC) military regime.

Chit Htoo appointed two of his sons, Saw Htoo Eh Moo and Saw Chit Chit, to key positions in the KNA, with both playing key roles in the KNA’s criminal network. Saw Htoo Eh Moo has interests in businesses related to the cyber fraud center, while Saw Chit Chit has been involved in military operations with the Tatmadaw and has commanded a KNA battalion in the fight against the government. He also holds shares and serves as a director in several KNA-linked companies.

The U.S. Office of Foreign Assets Control (OFAC) has designated the KNA as a ‘significant transnational criminal organization’ under Executive Order 13581 (as amended) and further designated it under Executive Order 14014 for its direct or indirect involvement in policies or actions that threaten the peace, security or stability of Burma.

As a result of the sanctions, U.S. authorities will be able to seize the assets of Chit Htoo and his two sons, as well as his business companies. If it turns out that it exists in US sovereign territory, and if Chit Tu and his son, including his company, have more than 50 percent of shares in any business in the US, that business will also be sanctioned.

However, it is well known that the sanctions imposed by the US and other Western countries on individuals or entities in Burma do not really affect these individuals because they knew from the beginning that their businesses were at risk of being sanctioned, so no one kept their assets in the US. However, the sanctions should have significant implications for the strategic interests of both the US and its competitor, China, as well as our neighboring country, Thailand, as follows:

First of all, both China and the US have shown the world that they are serious about cracking down on illegal cross-border businesses and cyber fraud, but with very different methods. While China uses its influence and soft power to gain Chit Tu’s cooperation, as has been reported in the news, the US uses sanctions and accuses Chit Tu of being the lord of all crimes in the region. This can be considered a competition to create narratives both regionally and globally.

Second, it is well known that the Chinese authorities have used Chit Tu’s local power and influence to release many Chinese victims and arrest Chinese suspects in several cross-border criminal cases earlier this year. The implication of Chit Tu’s public announcement is that it is a collaboration between his forces and the Chinese authorities. Such sanctions by the US will put considerable diplomatic pressure on Beijing. This could also affect the Thai authorities, because the US government’s hesitation to issue an arrest warrant for Chit Tu after the announcement could be used as an advantage in trade negotiations.

Third, China and its ASEAN neighbors, especially Thailand, which do or have done business with Shwe Kokko and other cities in the area under Chit Tu’s influence, could be affected by the sanctions. Even if the sanctions do not directly affect any business, they pose significant risks and instability to business operations, because at the very least, they increase insurance costs. Especially those who have business with American companies or people may be targeted.

In short, the announcement of sanctions against So Chit Thu this time may affect regional interests and strategies that go far beyond So Chit Thu and his sons, including his empire, because it means challenging the situation where conflict, civil war, and crime converge. A close neighbor like Thailand will be in a difficult position, having to balance Chinese pragmatism with the hard-line principles proposed by the United States and Western countries.