A 17-year-old boy in Scotland killed himself after being caught up in the scam.
In Hong Kong, more than 600 people, many aged between 20 and 30, fell victim to the same "sextortion" scam since the beginning of last year.
The scammers targeted people of varying ages in countries including Singapore, Indonesia, the US and Australia.
The scam involved the extorters creating fake identities of attractive young women to make contact with people overseas via Facebook and other social media.
"After getting acquainted with the victims...they engage in cybersex and this will be recorded unknown to the victims," Philippine police chief Alan Purisima said, adding that pornographic content was used to lure them into the sexual acts. "They then threaten to release it to friends and relatives."
Blackmail demands ranged from US$500 (S$630) to US$15,000, said Interpol, which described extremely well-run businesses controlled by organised crime gangs.
The scam was busted after Interpol and the Philippines police announced yesterday that they have arrested dozens of people in the Philippines in a crackdown on the exploding global menace of Internet "sextortion".
In the first operation of its kind, information shared between the Interpol Digital Crime Centre Hong Kong Police, Singapore Police Force and the Philippines National Police Anti-Cybercrime Group led to the identification of between 190 and 195 individuals working for organised crime groups operating out of the Philippines.
The raid, codenamed Operation Strikeback, was carried out in different parts of the Philippines on Wednesday and Thursday.
Interpol cybercrime chief Sanjay Virmani said 58 people were arrested this week in the Philippines, but emphasised they were only a small part of a fast-growing phenomenon with similar operations in many other parts of the world.
He said "sextortion" had emerged as a major concern in recent years as criminals took advantage of more people using social media and greater mobile Internet access via smartphones, AFP reported.
An Interpol statement said: "Operating on an almost industrial scale from call centre-style offices, such cyber-blackmail agents are provided with training and offered bonus incentives such as holidays, cash or mobile phones for reaching their financial targets."
Three Filipinos linked to the death of the Scottish teenager were among those arrested this week, the report said.
Mr Purisima said those detained would be charged over a range of crimes, including engaging in child pornography, extortion and using technologies to commit fraud.
This article was published on May 3 in The New Paper.Get The New Paper for more stories.