A coalition of rebel groups in Myanmar is now in control of the city of Laukkaing — a notorious hub of online scamming operations near the border with China.

Late on Thursday, Myanmar’s military government relinquished control of the city to the Three Brotherhood Alliance, which launched a surprise operation in Shan state, along the country’s northern frontier, in late October. According to the rebel group, the military has ceded control of the entire Kokang region, an area about the size of Lebanon.

Since the start of its campaign, the coalition has singled out its desire to root out the organized scamming operations that have proliferated under the watch of militias loyal to the ruling junta.

“To eradicate telecommunications fraud, fraud dens and their protective umbrellas across the country, including the China-Myanmar border areas, our three coalition forces decided to jointly carry out this military operation,” they wrote upon launching the offensive.

The rebel groups’ focus on the thriving scam industry is likely an attempt to curry favor with China, which has grown tired of seeing its citizens targeted by so-called pig butchering scams, or in many cases themselves trafficked into the compounds to carry out scams.

Over the weekend, junta leader Senior Gen. Min Aung Hlaing met with Chinese Vice Foreign Minister Sun Weidong in Naypyidaw to discuss border security and organized crime.

“The two sides will jointly maintain peace and stability on the China-Myanmar border, cooperate to combat cross-border criminal activities such as telecommunications fraud, and jointly promote regional peace, tranquility, development and prosperity,” the Chinese Foreign Ministry said in a statement following the meeting.

According to state media outlet China Daily, Minister of Public Security Wang Xiaohong also attended a virtual meeting with Myanmar’s Home Affairs Minister, Lt. Gen. Yar Pyae, over the weekend “during which they vowed to deepen law enforcement to safeguard security and stability in the border areas, particularly by cracking down on telecom and online fraud cases.”

In August 2023, the United Nations estimated that 120,000 people had been trafficked into scamming operations in Myanmar. Pig butchering scams typically involve a fraudster forming a relationship with a victim on social media, dating sites or messaging platforms.

On Jan. 5, Chinese state media said that 41,000 people involved in telecoms fraud in Myanmar were handed over to Chinese authorities last year. It is unclear how many of those taken into custody were victims of trafficking.

Despite the crackdown in northern Myanmar, observers have warned that operations could simply shift to criminal enclaves elsewhere in the country, especially along the border with Thailand and Laos.

In a New Year’s speech published online, Peng Deren, the commander of the Myanmar National Democratic Alliance Army — one of the three allied rebel groups who launched the offensive — suggested that this was already happening.

“Even when my army was pressing down on the border, there were military helicopters flying away the telecom fraud leader[s],” he said, adding that “four military families” who controlled Kokang scam operations had fled to a notorious enclave near the Thai party.

“If we want to completely eradicate the Kokang electronic fraud and rescue the trapped compatriots, we must eliminate the ‘four major families’ and the protective umbrella behind them.”

Jonathan Greig contributed to this story.