A significant effort to tackle the use of cryptocurrency in the buying and selling of child sexual abuse material (CSAM) is currently being led by US Senators Elizabeth Warren and Bill Cassidy. The senators are urging federal agencies to step up their efforts in combating the use of cryptocurrency for payments in the distribution of CSAM online, citing a rise in the problem. They are particularly concerned about the anonymity provided by cryptocurrency transactions, which can make it easier for individuals involved in CSAM trading to evade law enforcement. Data from various sources has indicated an increase in the use of cryptocurrency in illicit CSAM transactions in recent years.
In a letter to Attorney General Merrick Garland and Secretary of Homeland Security Alejandro Mayorkas, Warren and Cassidy highlighted the ways individuals involved in CSAM trading conceal their activities, including the use of crypto mixing services and ATMs to obscure the origin of funds. They also pointed out that sellers of CSAM are increasingly using “mixers” and “privacy coins” like Monero to launder profits and avoid detection by law enforcement. The senators emphasized the seriousness of the issue, noting that cryptocurrency is the preferred payment method for perpetrators of child sexual abuse and exploitation. They have urged the Department of Justice and the Department of Homeland Security to share their research findings on the extent of cryptocurrency’s role in the CSAM problem.
Elizabeth Warren has been vocal in her criticisms of cryptocurrency, particularly regarding its potential involvement in illicit activities. Her proposed anti-money-laundering legislation in July 2023 faced opposition from crypto advocacy groups, who argued that it could harm US startups and investors. Despite pushback, Warren has reiterated her belief that stringent regulations are necessary to prevent criminal misuse of cryptocurrencies, including in cases related to CSAM. The Department of Justice’s current technical capabilities in examining crypto transactions have already yielded results, as seen in the recent indictment of cryptocurrency exchange KuCoin and two of its founders.
The indictment of KuCoin and its founders on charges of operating an unlicensed money-transmitting business and violating the Bank Secrecy Act highlights the DOJ’s efforts to crack down on illicit activities involving cryptocurrency. The DOJ alleges that KuCoin facilitated the laundering of more than $5 billion in suspicious and criminal funds due to its failure to implement basic anti-money laundering policies, allowing it to operate as a haven for illicit money laundering activities. Warren and Cassidy’s call for increased scrutiny of cryptocurrency transactions related to CSAM comes in the wake of these developments, as they seek to address the growing problem of cryptocurrency being used in the distribution of child sexual abuse material. The senators have set a deadline for federal agencies to respond to their request for information on the issue.
