U.S. Treasury Reveals Surge in Reports Linking Cryptocurrency to Human Trafficking and Child Exploitation

The U.S. Treasury has unveiled a significant uptick in Suspicious Activity Reports (SARs) related to human trafficking and online child sexual exploitation (OCSE), particularly in connection with the use of cryptocurrencies or convertible virtual currency (CVC). The latest report, released on Tuesday, underscores a concerning trend observed in Bank Secrecy Act (BSA) reporting concerning serious crimes.

According to FinCEN, the overwhelming majority of BSA reports pinpoint Bitcoin as the primary CVC utilized for purported OCSE- and human trafficking-related activities. The agency emphasized the critical role of financial institutions' vigilance in timely reporting, which is instrumental in providing law enforcement agencies with crucial information to investigate potential cases and ultimately protect innocent lives.

Key findings from the Financial Trend Analysis (FTA) revealed a notable surge in BSA reports associated with OCSE and human trafficking, with the total number increasing from 336 in 2020 to 1,975 in 2021. Moreover, BSA filers specifically identified instances of child sexual abuse material (CSAM) or human trafficking and CSAM in 95 percent of the reported cases involving cryptocurrency.

The FTA also identified four typologies commonly associated with these crimes, including the use of darknet marketplaces, peer-to-peer exchanges, CVC mixers, and CVC kiosks. FinCEN's analysis, spanning from January 2020 to December 2021, underscores the urgency of addressing human trafficking and the illicit use of CVC.

FinCEN Director Andrea Gacki underscored the reprehensible exploitation of adults and children for financial gain by human traffickers and related criminals. Gacki emphasized the pivotal role of financial institutions in providing timely reporting, which aids law enforcement in investigating and combating these heinous crimes.

Treasury's Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, announced FinCEN's participation in the Canadian FIU’s "Project Protect," a collaborative effort aimed at combatting human trafficking. Furthermore, FinCEN's identification of human trafficking and cybercrime as national priorities, as well as the issuance of findings concerning crypto mixing under the USA PATRIOT Act, underscores the agency's commitment to combating these illicit activities.

FinCEN urges individuals who suspect instances of OCSE or human trafficking to immediately contact law enforcement, emphasizing the importance of collective efforts in combating these egregious crimes.

By fLEXI tEAM