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NEWS: Sharp increase in BSA reports identify human trafficking and child sexual abuse; crypto, main catalyst for crimes
By AML Intelligence Correspondent
The U.S. Treasury revealed an increase in STRs related to human trafficking and online child sexual exploitation.
A report released Tuesday highlighted the increase in Bank Secrecy Act (BSA) reports associated with the use of cryptocurrencies or convertible virtual currency (CVC) around serious crimes.
The BSA reports “that an overwhelming majority identified bitcoin as the primary CVC used for alleged OCSE and human trafficking-related activities,” FinCEN found.
Additionally, “the analysis highlights the value of BSA reports filed by regulated financial institutions,” the agency said.
The main findings of the Financial Trends Analysis (FTA) were:
- The total number of reports of online child sexual exploitation (OCSE) and human trafficking involving CVCs increased from 336 in 2020 to 1,975 in 2021.
- BSA reporters specifically reported child sexual abuse material (CSAM) or human trafficking and CSAM in 95% of OCSE and BSA reports related to human trafficking involving cryptography.
- The BSA reports that bitcoin is overwhelmingly identified as the primary crypto used for alleged OCSE and human trafficking-related activities. However, this does not necessarily mean that other types of crypto are not used for such crimes.
At the same time, four typologies were identified:
- the use of darknet markets that distribute CSAM,
- peer-to-peer exchanges,
- HVAC mixersAnd
- HVAC Kiosks
FinCEN stated that Financial Trend Analysis (FTA) showed an increase in Bank Secrecy Act (BSA) reports associated with crypto use, online child sexual exploitation (OCSE), and human trafficking. The FTA was based on BSA reports filed between January 2020 and December 2021.
“Human traffickers and perpetrators of related crimes despicably exploit adults and children for financial gain,” said FinCEN Director Andrea Gacki.
“Financial institution vigilance and timely reporting are essential to providing law enforcement agencies with the information needed to investigate potential cases of human trafficking, sex crimes against children and of related crimes. These reporting ultimately help law enforcement protect and save innocent lives,” she said.
The analysis detailed in this FTA strengthens Treasury’s efforts to combat human trafficking as well as illicit uses of CVCs.
Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, announced at the President’s Interagency Task Force to Monitor and Combat Trafficking that FinCEN has joined the Canadian FIU’s “Project Protect” – a Flagship PPP on human trafficking.
Additionally, in June 2021, FinCEN identified human trafficking and cybercrime among the “National Anti-Money Laundering and Counterterrorism Financing Priorities” issued pursuant to the Anti-Money Laundering Act. money of 2020.
Most recently, in October 2023, FinCEN issued a finding pursuant to Section 311 of the USA PATRIOT Act that cryptocurrency mixing is a class of transactions of particular concern with respect to money laundering and proposed requirements for declaration to increase transparency in mixing.
FinCEN asked that if you suspect OCSE or human trafficking is occurring or has occurred, please contact law enforcement immediately.
To report suspicious activity indicative of OCSE or human trafficking to the Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) tip line, call 1-866-DHS-2-ICE ( 1-866-347-2423) 24 hours a day, seven days a week, every day of the year. The Tip Line is also available outside the United States by calling 802-872-6199.
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