Experts have warned that Sri Lanka is emerging as a hub for transnational cybercrime, after a crackdown in south-east Asia pushed Chinese-run criminal networks to relocate their vast scam operations. The country is witnessing an “alarming increase of cybercrimes” perpetrated by people entering as tourists and then illegally setting up scam operations targeting people worldwide, according to Sri Lankan police spokesperson Fredrick Wootler.
Authorities have carried out more than a dozen raids on alleged scam operations since the beginning of the year, arresting and deporting almost 700 foreigners accused of involvement. On Thursday, the Sri Lankan police detained 18 Chinese citizens and one from Laos in Colombo. The Guardian visited the raid site and found dozens of fake documents left behind, including falsified legal certifications, fake US treasury documents, and a fake company registration claiming the company was worth $10bn. An anonymous crime investigation bureau officer said they also discovered 62 passports, mostly for Chinese nationals, along with phones, laptops, pen drives, RAMs, a processor, a stamp to forge documents, and a forged US business registration certificate that was framed and hung on the wall.
The majority of those arrested and deported this year have been Chinese citizens, but people from Vietnam, India, Indonesia, Laos, the Philippines, Malaysia, and Myanmar have also been detained. All had entered Sri Lanka on tourist visas. The transnational scam industry that flourished in south-east Asia over the past decade has become one of the largest organized-crime enterprises in the world, mostly run by Chinese gangs and staffed by hundreds of thousands of workers, many trafficked or coerced into the job. The US estimates Americans lost $10bn to south-east Asian scam centres in 2024.
As political pressure has grown on host countries in south-east Asia, scam compounds have faced a significant crackdown, pushing Chinese operatives to find new locations. Sri Lanka has emerged as a favoured destination due to the ease of getting tourist visas and newly introduced “digital nomad” visas, limited regulation on SIM cards and internet connections, and low-cost office and hotel rentals. There is already a significant Chinese presence in Sri Lankan infrastructure and business, and Sri Lanka has relaxed rules around online gambling and gaming. Its mechanisms to go after cybercrime are limited - the current modus operandi is mostly to deport foreigners rather than prosecute them.
Cybercrime researcher Mark Bo, author of *Scam: Inside Southeast Asia’s Cybercrime Compounds*, said he noticed a shift in operations towards Sri Lanka starting two years ago, as it began to be mentioned in Telegram posts and recruitment drives. “After the crackdown really ramped up in Cambodia, I saw a lot more posts on Telegram channels of people saying they were moving to Sri Lanka,” said Bo. “There’s clearly been some kind of transplanting of the exact same set-up there. It shows the challenge of controlling the industry because one of its defining characteristics is how mobile and how adaptable it can be.”
The operations have accelerated beyond authorities' control. Businessmen in Colombo complained that office rents had more than doubled in some complexes due to surge demand and high prices paid by groups from China. Instead of setting up visible compounds, police found operations tried to avoid detection by working in small groups of five people that rotate around different hotels, apartments, and offices every three months. One raid involved eight floors of an apartment building rented out by a Chinese crime syndicate attempting to scam American victims into investing in a fake US company, according to Superintendent of Police Kamal Ariyawansa. The Chinese embassy in Colombo has publicly acknowledged the involvement of its citizens in telephone fraud gangs that moved to Sri Lanka after the crackdown in southeast Asia, stating, “Cases like these pose immense harm, and the Chinese embassy provides full support to Sri Lankan law enforcement agencies in resolutely cracking down on suspects.”