In a recent analysis released by the US Department of the Treasury, it was revealed that the use of bitcoin in illegal activities, particularly human trafficking and the sexual exploitation of children, has seen a significant surge in recent years. The report, based on financial firms’ government filings from 2020 and 2021, uncovered a staggering 2,311 reported cases of crypto being used in such crimes, amounting to over $412 million.
Bitcoin ATMs Facilitate Illicit Trafficking Methods
The victims of these crimes, as stated in the report, are subjected to forced labor, slavery, involuntary servitude, and forced engagement in commercial sex acts. The use of cryptocurrency in these illicit activities has been on a sharp rise, with 1,975 reported cases in 2021, surpassing the 336 cases reported in 2020.
“Human traffickers and perpetrators of related crimes despicably exploit adults and children for financial gain,” expressed FinCEN Director Andrea Gacki in response to the findings. Gacki emphasized the crucial role of financial institutions in flagging these cases, ultimately aiding law enforcement in their efforts to protect and save innocent lives.
Source: FinCEN
Source: FinCENThe majority of the cases evaluated in the report involved the exchange of cryptocurrency for “child sexual abuse material” (CSAM), often taking place on darknet marketplaces. Crypto kiosks, commonly known as bitcoin ATMs, and transactions run through mixers were frequently used in these illicit transactions.
While the data examined in the report is from over two years ago, analysis conducted by Chainalysis suggests that the scale of crypto-powered child sexual abuse material networks actually peaked in 2021. This raises concerns that alternative cryptocurrencies and transaction techniques may have gained prominence for such purposes in the interim.
Treasury To Lawmakers: Implement Enhanced Tools To Fight Dirty Money
The report also highlights the increased awareness and vigilance of financial institutions regarding the criminal use of cryptocurrencies. This heightened awareness may have contributed to the rise in reporting of crypto-related crimes over the two-year period.
In response to these alarming findings, the US Treasury has voiced its concerns to House lawmakers, urging the implementation of enhanced legislative tools and resources to effectively combat crypto-related crimes. Brian Nelson, the Treasury’s Undersecretary for Terrorism and Financial Intelligence, emphasized the need for immediate action during a congressional hearing focused on terrorism and crypto crimes.
The use of cryptocurrency in illegal activities poses a significant challenge that requires collaborative efforts from various stakeholders. It is imperative to continue monitoring and addressing this issue to ensure the safety and well-being of individuals who are vulnerable to exploitation.
As the revelations from the US Treasury report shed light on the dark side of cryptocurrency, it is clear that swift action is necessary to combat these crimes and protect innocent lives.
Featured image from Adobe Stock, chart from TradingView
Source: https://bitcoinist.com/bitcoin-popular-for-financing-crimes-report/