Last week the US Justice Department announced it had seized $15 billion in Bitcoin held in self hosted wallets by Chen Zhi, 37, a Cambodian national. Chen, the founder and chairman of the Prince Holding Group, is accused of fraud and money laundering, including so-called pig butchering scams. The Cambodian Daily features a picture of Chen alongside Hun Sen, the President of Cambodia’s senate and the former prime minister who held the office for a total of 33 years through to 2023.
Prince Group’s ownership of a bank makes this case particularly relevant to tokenized deposits, as Cambodia operates an interbank tokenized deposit network. Last week, the US and UK applied sanctions to Prince Bank, which ranks outside Cambodia’s top ten but within the top twenty banks by assets. Multiple reports indicate the bank is suffering a run, prompting the National Bank of Cambodia to attempt to quell concerns. The situation is especially precarious because Cambodia is the only ASEAN country without a deposit insurance scheme.
When it comes to distributed ledger technology (DLT) and CBDC, Cambodia is known for its Project Bakong, despite Bakong not actually being a central bank digital currency. Instead, Bakong is a blockchain-based and central bank operated payment system that is effectively a tokenized deposit solution using a single brand for all banks. In other words, all Bakong balances represent a liability of a specific bank with whom that wallet holder has performed KYC.
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