Grey capital—illicit funds from transnational crime—is systematically penetrating Thailand’s financial and political institutions, according to recent reports on regional security. This “grey capital” manifests in the proliferation of mule accounts, citizenship fraud, and the rise of “dark” Special Economic Zones (SEZs) along the Mekong river, which now threaten state sovereignty and economic stability.
The Rise of Dark SEZs and the Golden Triangle
The Golden Triangle Special Economic Zone (GTSEZ) in Laos’ Bokeo province serves as a primary hub for this illicit flow. Run by Chinese-origin transnational criminal Zhao Wei, the GTSEZ is part of a broader trend of “dark SEZs” appearing across Laos, Cambodia, and Myanmar.
The financial scale is massive. Australia’s Reserve Bank reported that almost USD 1 trillion in private capital exited China between 2014 and 2017. While the total amount diverted to crime is unknown, some USD 2 billion has flowed into the GTSEZ alone. This investment has fueled an industry that some estimates place at nearly 70 per cent of the Lao formal economy.
Similar patterns appear in Myanmar. Shwe Koko in Karen State has evolved into a full-fledged city funded by Chinese state-owned enterprises. According to reports, scam center revenues in Shwe Koko now account for over 20 per cent of Myanmar’s formal economy.
Did you know? In some “dark SEZs,” the state has lost basic control. For example, the Lao national police must seek permission to enter the GTSEZ, effectively ceding the state’s monopoly on the legitimate use of force.
Institutional Capture and Thai Political Vulnerability
Thailand is not merely a neighbor to these zones; it is being corroded from within. Analyst Jacob Sims notes that a dominant economic engine inevitably becomes a powerful political engine, leading to institutional capture.
Evidence of this capture appears in several Thai state organs:
- Parliament: Reports indicate a Chinese transnational criminal established his own office in Parliament.
- Law Enforcement: Thailand dismissed 110 immigration police for taking bribes from Chinese mafias operating in Bangkok.
- Citizenship: Chinese criminal syndicates frequently obtain Thai citizenship through the corruption of officials, allowing them to launch new companies and facilitate more money laundering.
Even state infrastructure is affected. After the State Audit Office building collapsed in 2025, investigations found that China Rail Engineering Company used nominees to circumvent Thai law and colluded with SAO officials to win the contract.
Financial Instability and the ‘Mule Account’ Crisis
The Bank of Thailand governor announced moves in November 2025 to try to increase surveillance of grey capital flows. The central bank is concerned that inflows of illicit funds may be propping up the value of the baht, masking the underlying weakness of the Thai economy.
The mechanism for this laundering is the “mule account.” Between October 2025 and May 2026, Thai authorities found:
- Approximately 200,000 individual mule accounts.
- 10,000 corporate mule accounts.
- Over 1 million linked transactions.
The Impunity Gap: Why Prosecutions Fail
Despite the data, successful prosecutions remain rare. High-profile figures like Tu Hao (also known as Chaiyanat Kornchayanant, a Chinese-born businessman who acquired Thai citizenship) and Wang Hongbin (also known as Oudom Hongbin, a Chinese-born entrepreneur with Laotian and Vanuatan passports) have been investigated by Thai police but remain at large.
Political inaction is also evident. In 2024, People’s Party MP Rangsiman Rome presented Parliament with evidence of Thai military and police officers’ involvement in eastern Myanmar’s casinos. Rome cited more than 17 casino businesses with Thai owners or Thai partners, including a significant number owned by Thai uniformed personnel. The Pheu Thai government at the time remained silent, and the subsequent Bhumjaithai government appears similarly passive.
A specific example of this impunity involves Anutin Charnvirakul’s former deputy Finance Minister Vorapak Tanyawong. Despite credible evidence of him profiting from the laundering of a scam center, no further action followed his resignation; instead, Tanyawong is suing the journalist who uncovered the evidence.
Pro Tip for Investors: When evaluating emerging markets in Southeast Asia, look beyond GDP growth. Check the Corruption Perception Index and reports on “grey capital” to determine if economic growth is organic or driven by illicit transnational flows.
Frequently Asked Questions
What is ‘grey capital’?
Grey capital refers to illicit funds—often from transnational organized crime, scams, and money laundering—that enter a country’s economy and are used to buy political influence or legitimate assets.
What are ‘dark SEZs’?
These are Special Economic Zones that, while officially sanctioned for trade, operate as autonomous hubs for criminal activities, such as online scam centers and casinos, often beyond the reach of national law enforcement.
How does grey capital affect the Thai Baht?
According to the Bank of Thailand, inflows of illicit funds may be propping up the baht, keeping its value high even when the domestic economy is struggling.
What do you think about the rise of dark SEZs in Southeast Asia? Does your country have similar challenges with illicit capital? Let us know in the comments below or subscribe to our newsletter for more deep dives into regional security.
