Prince Bank Collapse: A Shockwave Rocking Cambodia—and Southeast Asia

The National Bank of Cambodia (NBC) has ordered the immediate cessation of Prince Bank’s operations, triggering a liquidation process overseen by independent auditors, following the extradition of its founder, Sino-Cambodian billionaire Chen Zhi, to China on charges of large-scale cyber fraud.

This case, which exposes troubling links between legitimate finance and transnational criminal networks, risks contaminating regional banking stability—particularly in Thailand, where similar crises have already erupted. While Cambodian depositors are being urged to withdraw their funds calmly, the episode raises broader questions about the resilience of Southeast Asia’s financial systems in the face of the surge in digital scams.

Genesis of a Controversial Financial Empire

Founded in 2015 as a microfinance institution by Chen Zhi’s Prince Group, Prince Bank rapidly climbed the ranks, becoming a commercial bank in 2018. At its peak, it managed nearly USD 1 billion in assets through 36 branches across Cambodia.

Chen, a naturalized Cambodian and influential figure with investments spanning real estate, casinos, and telecommunications, built a conglomerate operating in more than 30 countries—often beneath the radar of Western regulators. U.S. and U.K. sanctions imposed in October 2025 revealed Prince Bank as a potential front for laundering proceeds from crypto-related frauds, including so-called “pig butchering scams”—sophisticated schemes in which scammers cultivate victims’ trust before draining them of millions.

In its official statement, the NBC justified the liquidation on the grounds of “systemic risks” and an inability to maintain solvency, following an initial suspension of services in December 2025. Morisonkak MKA, a reputable audit firm, has been appointed to inventory assets, reimburse priority depositors, and pursue debtors, while all routine operations remain frozen.

The Global Web of Cyber Scams

At the heart of the scandal, Chen Zhi is accused of overseeing “scam compounds” in Cambodia—fortified enclaves housing thousands of forced workers, often recruited through deception from Southeast Asia and Africa and compelled to carry out online fraud generating billions of dollars. Amnesty International and the United Nations have documented at least 53 such sites, producing more than USD 11 billion in stolen bitcoins through methods involving human trafficking and psychological torture. U.S. authorities estimate that these operations, linked to Chinese cartels, have victimized individuals in 100 countries, including across Europe and the United States.

Prince Group has denied any involvement, portraying itself as a pillar of the Cambodian economy with legitimate partnerships. However, Chinese authorities released images of Chen in handcuffs and hooded during his extradition on January 7, 2026.

Banking Contagion in Thailand: The “Mule Accounts” Case

Thailand, Cambodia’s neighbor and close economic partner, is bearing the brunt of the fallout. In September 2025, a massive police operation targeting “mule accounts”—bank accounts used to launder scam proceeds—froze tens of thousands of accounts, sparking unprecedented bank runs. The Bank of Thailand (BoT) injected emergency liquidity and imposed withdrawal limits, exposing the vulnerability of major local banks such as Kasikorn and Siam Commercial Bank to illicit financial flows.

This Thai scandal, which resulted in billions in indirect losses, is part of a broader regional wave: online scams have surged by 300% since 2022, fueled by the pandemic and accelerated digitization.

McKinsey notes that Thai banks, still reliant on legacy systems averaging 25 years in age, struggle to detect suspicious transactions, with high false-positive rates in anti-money-laundering tools. As a result, 20–30% of physical branches are expected to close by 2030.

Vulnerabilities Across Southeast Asia: Myanmar, Laos, and the Philippines

Myanmar, under military rule, has hosted massive scam centers such as KK Park—shut down in 2025 but subsequently relocated to neighboring Laos, where casinos like Kings Romans have been converted into criminal hubs. In Laos, weak banking regulation allows Chinese entities to operate freely, with large-scale withdrawals reported in 2025.

The Philippines, a pioneer in business process outsourcing, is seeing a rise in fraud via illegal call centers, prompting Bangko Sentral ng Pilipinas to tighten its Know Your Customer (KYC) requirements.

Indonesia and Malaysia, more digitally advanced, are investing in AI to track anomalies: Malaysia closed 1,500 suspicious accounts in 2025, while Indonesia aims to transition to a fully digital banking system by 2027.

Economic Impacts and Lessons for the Region

The liquidation of Prince Bank exposes 200,000 customers to potential losses, although the NBC guarantees deposits up to USD 500 through a deposit insurance fund. Economically, the move weakens Cambodia’s banking sector—dominated by foreign players holding 80% of assets—and threatens GDP growth, projected at 5.5% in 2026. In Thailand, eroded confidence could slow the post-pandemic recovery, with banking-sector inflation estimated at 2–3%.

The lessons are clear: modernization of core banking systems, as advocated by H&F Advisers, and stronger ASEAN-China cooperation through anti-scam task forces. Fintech platforms such as GCash (Philippines) and TrueMoney (Thailand) are emerging as safer alternatives, but the transition will require massive investment—an estimated USD 10 billion region-wide by 2030.

Ultimately, this crisis could catalyze stricter regulation, protecting emerging economies from a form of “criminal banking” that threatens their future.

Outlook: Toward a Fortified Regional Banking System?

In the short term, Prince Bank’s auditors are expected to publish a report by March 2026, potentially revealing hidden assets overseas.

In the long run, ASEAN may move to harmonize its anti-money-laundering (AML) standards, inspired by Singapore’s model, where penalties for non-compliance tripled in 2025. In Thailand, the BoT is accelerating its “Bank 4.0” initiative, integrating blockchain to trace financial flows.

The Prince Bank affair is not an isolated incident but a warning signal: Southeast Asia—an economic engine of 650 million people—must balance inclusive growth with cybersecurity. Failing that, further spectacular collapses loom, undermining the confidence of foreign investors who inject USD 200 billion annually into the region.