From Jamil A Ghani
With Asean leaders gathering in Kuala Lumpur from Oct 26 to 28 under Malaysia’s chairmanship theme of “Inclusivity and Sustainability”, events beyond the formal agenda are already shaping the conversation.
On Oct 14, the US department of justice unsealed an indictment against Chinese-born Chen Zhi, chairman of Cambodia’s Prince Holding Group, alleging forced labour “scam compounds” and multi-billion dollar cryptocurrency fraud. The department simultaneously filed a civil forfeiture action, describing it as its largest-ever cryptocurrency seizure – 127,271 bitcoins, worth roughly US$15 billion.
That same day, the US Treasury’s Office of Foreign Assets Control (OFAC), in coordination with the UK’s Foreign, Commonwealth & Development Office, sanctioned 146 individuals and 117 entities linked to what it described as the Prince Group Transnational Criminal Organization.
In a parallel move, FinCEN issued a Section 311 rule under the USA PATRIOT Act, designating Cambodia-based Huione Group as a primary money-laundering concern, effectively cutting it off from the US financial system. The network allegedly laundered billions from “pig-butchering” scams – frauds that build online trust before defrauding victims.
Investigations by ABC News (Australia) and Radio Free Asia report that Huione Pay, an affiliate, is directed by Hun To, reportedly a cousin of Cambodian Prime Minister Hun Manet. US authorities have not confirmed this link. Cambodia’s government has called on Washington and London to share evidence and pledged full cooperation while denying state complicity.
These allegations emerge as Asean prepares for its Kuala Lumpur summit.
Law enforcement as statecraft
US officials describe the coordinated operation as Washington’s use of law enforcement tools to advance global financial governance standards and demonstrate intolerance for corruption and trafficking.
For Asean, which traditionally treats transnational crime as a technical “non-traditional security” issue, the US approach signals a shift that could require institutional adaptation.
Observers warn that treating the Prince Group case solely as a bilateral matter risks making Asean appear complacent towards criminal networks exploiting regional regulatory gaps. At the same time, open criticism of a member state could strain Asean’s consensus. Balancing principle and unity without undermining either remains the challenge.
The case also arrives amid a shifting strategic landscape. China remains Asean’s largest trading partner, while the US is among its leading investors, particularly in manufacturing and technology.
Both Prince Group and Huione Group expanded as Chinese capital surged in Cambodia, and their operations are closely embedded in Chinese-language commercial networks. Analysts note that this gives Washington’s enforcement actions indirect geopolitical weight, tightening scrutiny on the cross-border financial systems that link Southeast Asia and China.
Trump’s return an Asean dilemma
US president Donald Trump has confirmed his attendance to the summit, his first since 2017, and will witness a Cambodia-Thailand ceasefire framework informally dubbed the “Kuala Lumpur Accord”. Putrajaya also plans bilateral talks with Washington on sectoral tariffs, especially in semiconductors.
Analysts say that if Washington highlights illicit finance, human trafficking, and cyber-fraud during the summit, Asean could face pressure to deliver tangible outcomes, aligning governance standards without undermining sovereignty.
Observers note that the Prince Group case has already shifted regional attention towards financial transparency and digital integrity, alongside traditional trade and investment issues.
Cybersecurity as a regional test
Malaysia’s chairmanship priorities include cybersecurity and data protection. The National Cyber Security Agency is coordinating the Asean Cybersecurity Cooperation Strategy 2026-2030, aiming to strengthen digital forensics capacity, incident-response coordination, and secure data-sharing.
Policy experts say such initiatives offer Asean a chance to demonstrate competence rather than caution. They have urged the bloc to convert these commitments into practical reforms, such as forming a regional task force on cyber-fraud, conducting peer reviews of financial integrity frameworks, and strengthening collaboration with the Financial Action Task Force (FATF).
Both the FATF and the International Monetary Fund (IMF) have warned that Southeast Asia’s expanding digital-asset markets are outpacing regulatory capacity, highlighting the need for coordinated regional responses.
The stakes for Asean
With Trump attending, the summit will test whether Asean can uphold governance standards in an era where finance, technology, and security increasingly intersect.
Analysts have long urged Asean to move beyond rhetorical communiqués and commit to concrete cooperation on financial integrity and digital governance, an approach that, some suggest, could turn crisis into renewal. But if leaders again retreat to cautious language about “respecting domestic processes”, it will reinforce doubts about Asean’s collective resolve.
The Prince Group case is now more than a criminal proceeding.
It is a test of Asean’s institutional maturity and its ability to defend the regional order against transnational crises that blur legal, economic, and geopolitical boundaries.
Kuala Lumpur’s response may reveal whether Asean remains a diplomatic stage or evolves into a community capable of shared responsibility in a contested Indo-Pacific.
Jamil A Ghani is a PhD candidate at the S Rajaratnam School of International Studies, Nanyang Technological University, Singapore, and a founding fellow of Futures Office.
The views expressed are those of the writer and do not necessarily reflect those of FMT.