MHA considering various proposals for returning recovered scam proceeds to victims: Sun Xueling

The Ministry of Home Affairs (MHA) is considering various proposals for returning recovered scam proceeds to victims, Minister of State for Home Affairs Sun Xueling said in Parliament on Friday (Feb 28).

She was responding to Workers' Party MP Gerald Giam's question on whether the government has considered setting up a scam victim restitution fund, which is financed by proceeds recovered from money laundering.

Setting up such a fund will pose operational challenges, Sun said.

As scam syndicates often operate other crime businesses such as illegal moneylending, it is challenging to ascertain that all recovered monies come from scams.

They could be proceeds that pertain to other forms of crime, therefore, other victims may feel they have a claim to these proceeds.

Due to the co-mingling of funds, it is also difficult to track whether a dollar that was recovered is the same one lost by a victim, especially in cases involving cryptocurrency, Sun explained.

Hence, it is hard to tell which victim has a right to the recovered money.

Referencing statistics from the annual Scams and Cybercrimes brief released on Tuesday, she said that only $182 million — a fraction of the $1.1 billion lost to scams in 2024 — are recovered.

"There are going to be far more claimants for the monies than there are actually monies that are recovered."

Even if they can get their money back, it would be a tiny fraction of what they lost in the first place, Sun noted.

The minister of state also highlighted a potential risk if there is a scam recovery fund.

"If scammers know we have a consolidated fund, they may try to pivot and see if they could entice other types of mules to participate in scam activities and try to 'recover' the monies from this scam recovery fund."

Sun added: "At the end of the day… we should do our very best to be able to find some way of recovering proceeds and returning them to victims."

This article has been edited for clarity. Minister of State Sun Xueling has clarified her response to Gerald Giam's question.

xingying.koh@asiaone.com

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