Cambodians Rush to Withdraw from Prince Bank Amid Chen Zhi Sanctions Scandal

By Lechat

A Sudden Shock to Cambodia’s Financial System

In mid-October 2025, a wave of panic swept across Cambodia’s banking sector. Long lines formed outside branches of Prince Bank, one of the country’s largest commercial lenders, as worried depositors rushed to withdraw their savings. The bank, part of the sprawling Prince Holding Group, has become the center of a financial storm following the U.S. and U.K. sanctions against its chairman, Chen Zhi, for alleged involvement in large-scale fraud, money laundering, and human trafficking schemes.

Chen Zhi and Price Bank


What began as an international legal action has rapidly evolved into a domestic crisis of confidence, exposing the fragility of Cambodia’s financial institutions and the deep entanglement between politics, business, and alleged criminal networks.

The Rise and Fall of a Cambodian Tycoon

Chen Zhi, also known as Vincent Chen, was once hailed as a symbol of Cambodia’s modern economic ambition. Through Prince Holding Group, Chen cultivated close ties with the Cambodian elite, investing heavily in real estate, hospitality, and finance. His company became a dominant player in Phnom Penh’s skyline, branding itself as a “visionary conglomerate” aligned with Cambodia’s rapid urban development.

However, the glossy façade has crumbled. On October 14, the U.S. Department of Justice (DOJ) unsealed an indictment charging Chen with wire fraud conspiracy and money-laundering conspiracy. Simultaneously, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and the U.K.’s Foreign, Commonwealth & Development Office (FCDO) jointly sanctioned Chen and several of his associates, labeling the Prince network as a “transnational criminal organization.”

According to the DOJ, Prince Group was at the center of a network running “scam compounds” across Southeast Asia — facilities where trafficked laborers were coerced into conducting “pig-butchering” scams, a term referring to long-term online fraud operations that lure victims into fake romantic or investment relationships before defrauding them. U.S. authorities say the criminal proceeds were laundered through cryptocurrency, real estate, and shell companies linked to Chen’s empire.

In one of the largest digital asset seizures in history, the DOJ confiscated 127,271 Bitcoin—worth approximately $15 billion—from wallets tied to Chen’s network. If convicted, Chen faces up to 40 years in prison.

A Crisis of Confidence

Almost immediately after the sanctions were announced, public trust in Prince Bank plummeted. Customers flooded branches in Phnom Penh and provincial cities, demanding to withdraw cash. “If we don’t get our money out now, we might never see it again,” one resident told local newspaper Kiri Post.

The panic was exacerbated when Prince Bank’s mobile app and website went offline, reportedly due to “third-party service disruptions.” Customers found themselves unable to transfer funds or check balances. Online forums filled with urgent warnings: “Withdraw now before it’s too late.”

By October 17, scenes of chaos erupted outside multiple branches, with long queues stretching into the streets. Chosun Daily reported that several branches temporarily halted operations due to liquidity shortages, further feeding the rumor mill. Social media amplified the crisis, with photos of crowded bank lobbies and frustrated customers going viral.

Official Responses: Damage Control Mode

Prince Bank issued a statement insisting that it “remains financially sound” and continues to “operate in full compliance with Cambodian laws and the standards of the National Bank of Cambodia (NBC).” The board, it said, was “closely monitoring the situation” and reassured customers that “all deposits are safe.”

The National Bank of Cambodia also intervened, releasing a statement on October 18 declaring that the country’s banking system “remains stable and fully liquid” and that authorities were “taking necessary measures to ensure all accounts at Prince Bank function normally.” The NBC added that it was conducting a “careful investigation” into the bank’s operations to ensure compliance with Cambodian law.

Despite these reassurances, depositors’ fears have not abated. Economic analysts note that once public trust erodes in a financial institution, rebuilding it is far more difficult than stabilizing its balance sheet.

The Broader Implications

Contagion Risk and Financial Stability

A bank run at one major institution can quickly infect the rest of the sector. Although NBC claims the Cambodian banking system remains solvent, observers warn that the psychological contagion could spread if the public begins doubting other banks’ links to politically connected conglomerates.

Cambodia’s banking sector has grown rapidly over the past decade, with total assets exceeding 200% of GDP. Much of this growth has been fueled by real estate speculation and foreign investment, both vulnerable to sudden confidence shocks. A loss of faith in one prominent bank could trigger systemic liquidity pressure, especially if foreign correspondent banks restrict transactions due to compliance risks tied to sanctions.

Political and Governance Fallout

Chen Zhi’s downfall also raises uncomfortable questions about Cambodia’s governance and anti-corruption frameworks. Chen had previously been described by local media as an advisor to the Prime Minister and a philanthropist supporting national development initiatives. His influence in the political and business elite was significant.

With the U.S. and U.K. publicly accusing him of leading an international criminal syndicate, Cambodia’s leadership now faces the challenge of distancing itself from Chen without admitting systemic failures that allowed his empire to flourish. Western governments may use this case to pressure Phnom Penh to crack down on human trafficking, online scams, and financial opacity, areas where the country has faced repeated international criticism.

The Reputational Damage to Cambodia

Cambodia’s image as a developing but open economy has taken a major hit. Global headlines have linked the country to forced labor, cyber fraud, and money laundering. For a nation hoping to attract sustainable investment, such associations are disastrous.

“Once a financial institution or tycoon becomes synonymous with crime, it’s not just about one company—it taints the entire jurisdiction,” said an international banking compliance expert interviewed by The Wall Street Journal. “Correspondent banks and investors will now treat Cambodia as a high-risk country, at least temporarily.”

Human Stories Behind the Headlines

The Prince Bank crisis is not just a macroeconomic event—it has real consequences for ordinary Cambodians. For many citizens, bank deposits represent a lifetime of savings. Losing access to funds, even temporarily, could mean financial ruin.

Small business owners have reported delayed payments and frozen transfers, complicating trade and payroll. “I can’t pay my suppliers,” one Phnom Penh shopkeeper told Nation Thailand. “I have money in my account, but the app doesn’t work, and the bank says to wait.”

Meanwhile, former employees of Prince Group subsidiaries, speaking anonymously, claim that “staff were told not to speak to the media” and that internal communications have been chaotic since the sanctions.

Expert Commentary

Financial analysts point out that while Prince Bank may not be insolvent, the reputational damage could prove fatal unless swift, transparent measures are taken. “Liquidity crises start in people’s minds,” said Dr. Albert Lau, an economist at the University of Hong Kong. “Once depositors believe their money is at risk, perception becomes reality.”

Geopolitical observers argue that the U.S. sanctions were designed not only to punish Chen Zhi but also to send a message to Southeast Asia: Western powers are intensifying scrutiny on transnational cybercrime and financial networks that exploit weak governance.

“Chen Zhi’s case is a warning shot,” said political analyst Sophal Ear. “Cambodia’s entanglement with illicit finance has long been an open secret. The difference now is that Washington and London are willing to act.”

What Comes Next

Prince Bank faces an uphill battle to restore trust. Analysts suggest several potential outcomes:

  1. Regulatory Intervention: NBC could impose tighter oversight or even take temporary control of the bank to stabilize operations.

  2. Restructuring or Sale: Prince Bank may attempt to separate itself legally and operationally from Prince Holding Group, or seek new investors to restore confidence.

  3. Continued Bank Runs: If confidence continues to erode, the bank could face further liquidity crunches, leading to forced closures or government-backed guarantees.

For Cambodia’s government, the stakes are high. A successful containment of the crisis could demonstrate resilience; failure could spark a wider financial panic and damage the credibility of the country’s regulatory system for years to come.

A Test of Cambodia’s Financial Maturity

The collapse of confidence in Prince Bank marks one of the most serious tests yet for Cambodia’s young banking system. It illustrates how international sanctions, digital-era scams, and domestic governance weaknesses can intersect to create a perfect financial storm.

Whether Cambodia can weather this storm depends not only on liquidity injections or reassuring statements but on deeper reforms — transparency, accountability, and a genuine separation between business empires and political power.

For now, the image of ordinary Cambodians waiting in long lines under Phnom Penh’s sweltering sun, clutching withdrawal slips and hoping to retrieve their savings, stands as a stark reminder:
in the age of global finance, trust is the most valuable currency of all.


Related post: The Fall of a Digital Empire: What the Chen Zhi Case Reveals About the Dark Side of Tech Wealth

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