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NEWS: Surge in BSA reports identify human trafficking, child sexual abuse; crypto major enabler of crimes

By AML Intelligence Correspondent

THE US TREASURY has revealed a surge in STRs in relation to human trafficking and online child sexual exploitation.

A report released Tuesday highlighted the increase in Bank Secrecy Act (BSA) reporting associated with the use of cryptocurrencies or convertible virtual currency (CVC) around the serious crimes.

The BSA reports “overwhelmingly identified bitcoin as the primary CVC used for purported OCSE- and human trafficking-related activity,” FinCEN revealed.

Moreover, the “analysis highlights the value of BSA reporting filed by regulated financial institutions,” the agency said.

Key findings in the Financial Trend Analysis (FTA) were:

  • Total number of Online Child Sexual Exploitation (OCSE) and human trafficking-related BSA reports involving CVC increased from 336 in 2020 to 1,975 in 2021.
  • BSA filers specifically reported child sexual abuse material (CSAM) or human trafficking and CSAM in 95pc of the OCSE and human trafficking-related BSA reports involving crypto.
  • BSA reports overwhelmingly identified bitcoin as the primary crypto used for purported OCSE and human trafficking-related activity, however, this does not necessarily mean that other types of crypto are not used for such crimes.

Meanwhile, four typologies were idenitifed:

  • the use of darknet marketplaces that distribute CSAM,
  • peer-to-peer exchanges,
  • CVC mixers, and
  • CVC kiosks

FinCEN said the Financial Trend Analysis (FTA) showed an increase in Bank Secrecy Act (BSA) reporting associated with the use of crypto and online child sexual exploitation (OCSE) and human trafficking. The FTA was based on BSA reporting 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 institutions’ vigilance and timely reporting is critical to providing law enforcement agencies with the information needed to investigate potential cases of human trafficking, sexual crimes against children, and related crimes. This reporting ultimately helps law enforcement protect and save innocent lives,” she said

The analysis detailed in this FTA furthers Treasury efforts to combat human trafficking as well as the illicit uses of CVC.

Brian Nelson, Treasury’s Under Secretary 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.

In addition, in June 2021, FinCEN identified human trafficking and cybercrime as among the “Anti-Money Laundering and Countering the Financing of Terrorism National Priorities” issued pursuant to the Anti-Money Laundering Act of 2020.

More recently, in October 2023, FinCEN issued a finding pursuant to Section 311 of the USA PATRIOT Act that crypto mixing is a class of transactions of primary money laundering concern and proposed reporting requirements to increase transparency in connection with mixing.

FinCEN asked if you suspect OCSE or human trafficking is occurring or has occurred, please immediately contact law enforcement.

To report suspicious activity indicative of OCSE or human trafficking to the U.S. 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 accessible outside the United States by calling 802-872-6199.

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