Prince Bank in Cambodia faces mass withdrawals after parent firm hit by US and UK sanctions

Prince Bank, one of Cambodia’s largest commercial banks, is facing a severe bank run following sweeping sanctions imposed by the United States and the United Kingdom on its parent company, Prince Group.

According to The Chosun Daily citing foreign media, large crowds of customers lined up outside the bank’s main branch in Phnom Penh early in the morning to withdraw their savings. The surge in withdrawals caused chaos, with reports that several branches were forced to temporarily suspend transactions due to liquidity shortages.

The mass withdrawal came in response to sanctions announced on October 14 by the US Department of Justice, the US Department of the Treasury, and the British government. The measures target Prince Group and its CEO, Chen Zhi.

The US Justice Department has charged Chen with fraud and money laundering, and has moved to seize 127,271 bitcoins — worth around 21.45 trillion won — allegedly laundered by Chen and Prince Group. The case marks the largest asset seizure in the department’s history. Chen could face up to 40 years in prison if convicted.

Meanwhile, the UK government added Golden Fortune Resort World, operator of the Prince Compound on the outskirts of Phnom Penh, to its sanctions list. It also banned Jinbei Group — which runs hotels and casinos linked to Prince Group — and the digital currency platform Byex Exchange. British authorities have additionally frozen Chen’s property assets in London and barred him from accessing the UK financial system.

Prince Group wields significant influence in Cambodia’s economy through its real estate, financial, and hospitality ventures. However, it has faced mounting allegations of serious human rights abuses, including operating illegal online scam centres that defrauded billions of dollars from victims worldwide and engaging in human trafficking.

As shocking revelations about the parent company spread, public confidence in its subsidiary, Prince Bank, plummeted overnight. Concerned depositors rushed to withdraw cash amid growing fears of financial instability.

In an attempt to calm the public, Prince Bank issued a statement saying, “The US Treasury’s Office of Foreign Assets Control (OFAC) measures will not affect the bank’s operational capability. We remain committed to managing all customer relationships with honesty and transparency.”

However, the statement did little to ease public anxiety as fears of contagion and financial fallout continued to rise.