FinCEN Reports Increase in Bitcoin Links to Human Trafficking and Child Exploitation Incidents

The Financial Crimes Enforcement Network (FinCEN) of the US Treasury has reported an increase in Bitcoin transactions associated with human trafficking and online child exploitation incidents.

FinCEN’s recent analysis indicates that approximately 95% of cases related to online child exploitation and human trafficking involve digital assets or “convertible virtual currencies.”

In its February report, FinCEN emphasizes that Bitcoin has increasingly been utilized as a payment method in exploitation cases.

The number of reports concerning online child exploitation and human trafficking linked to virtual currency rose from 336 in 2020 to 1,975 in 2021.

FinCEN aims to protect the financial system from illegal activities and combat money laundering, thereby enhancing national security through the collection and analysis of relevant information.

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The report published by the network is intended for both the public and law enforcement agencies engaged in addressing online child exploitation and human trafficking-related issues.

Out of 2,311 Bank Secrecy Act (BSA) reports received, 2,157 identified Bitcoin as the primary convertible virtual currency involved in human trafficking and online child exploitation cases.

From this data, FinCEN identified over 1,800 unique wallet addresses connected to suspected online child exploitation and human trafficking offenses.

FinCEN Partners With Project Protect

FinCEN is closely observing the rise in such cases as it has partnered with the Canadian financial intelligence unit’s “Project Protect,” a key public-private initiative focused on human trafficking.

In June 2021, FinCEN recognized human trafficking and cybercrime as part of the “Anti-Money Laundering and Countering the Financing of Terrorism National Priorities” established under the Anti-Money Laundering Act of 2020.

In October, FinCEN proposed that domestic financial institutions and agencies “implement certain record keeping and reporting requirements” for transactions involving crypto mixers.

The agency noted that “the percentage of CVC [convertible virtual currencies] transactions processed by CVC mixers that originated from likely illicit sources is increasing.”

Treasury Highlights Crypto Used By Criminals

<pEarlier this month, the US Department of the Treasury published its 2024 National Risk Assessments on Money Laundering, Terrorist Financing, and Proliferation Financing, detailing the most pressing threats to the United States in terms of illicit finance.

The Treasury Department issued a serious warning about the rising use of cryptocurrencies by criminals, fraudsters, and other unlawful entities.

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The report provided updates to the anti-money laundering and counter-financing of terrorism framework, addressing concerns such as the fentanyl crisis, terrorist acts, ransomware effectiveness, professional money laundering, and the expansion of digital payments.

Appeal To Report Cases

FinCEN is urging the public to report any instances of child exploitation and human trafficking to law enforcement authorities.

The US Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) tip-off line is: 1-866-DHS-2-ICE (1-866-347-2423), and individuals outside the US can reach authorities by calling 802-872-6199.

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