U.S. Sen. Elizabeth Warren (D-Mass.) is attacking cryptocurrencies again, this time linking digital asset markets to child sexual abuse material (CSAM).
In a bipartisan open letter to the U.S. Department of Justice and Homeland Security, co-signed by Senator Bill Cassidy of Louisiana, Warren called cryptocurrencies “payment of choice for child abuse material.”
“We are writing to express our concerns about the use of cryptocurrencies in the illicit trade in child sexual abuse material and to obtain information about the tools the Department of Justice and Homeland Security need to root out this illicit trade.” .
Warren and Cassidy said in their letter that cryptocurrencies and the anonymity they provide facilitate the trade in images and videos depicting child sexual abuse, pointing to a 2021 report from the International Center for Missing and Exploited Children. I did.
The letter also cited a February report from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that designated Bitcoin as a “convertible virtual currency” (CVC) for child exploitation and human trafficking in 2020-2021.
FinCEN reported that of the 2,311 reports received, “2,157 reports specifically mentioned Bitcoin as the primary CVC used in (online child sexual exploitation) and human trafficking-related activities.” No currency was specified in the remaining documents. “From this dataset, FinCEN identified more than 1,800 unique Bitcoin wallet addresses suspected of OCSE and human trafficking crimes.”
The senators also noted a recent “Crypto Crime Report” from blockchain analytics firm Chainalytic showing that privacy coins like Monero are being adopted by CSAM providers.
“Bitcoin remains the most widely used cryptocurrency for purchasing CSAM, although many CSAM providers have adopted Monero in recent years,” Chainalytic wrote. “The data suggests that Monero’s role is more widespread in CSAM vendors’ efforts to launder on-chain profits rather than obfuscate the purchases themselves.”
Chainaylsis acknowledged that it is difficult to verify Monero’s role directly on-chain using standard blockchain analysis techniques, but was able to report on CSAM providers using Monero-friendly instant exchanges as proxies.
Senator Warren’s office did not immediately respond to a request for comment. decryption.
Warren and Cassidy set a May 10 deadline for the Justice Department and Department of Homeland Security to respond, which they said would help Congress and the Biden administration do their part to address issues related to CSAM and cryptocurrencies.
“Existing anti-money laundering regulations and law enforcement methods struggle to effectively detect and prevent these crimes,” the letter said. “We are committed to ensuring that Congress and the Administration have all the tools necessary to root out CSAM and punish sellers of this material.”
In addition to asking the agencies to outline their most pressing needs, the letter provides a current assessment of the role cryptocurrencies play in facilitating CSAM, and whether the use of cryptocurrencies poses unique challenges to efforts to identify and prosecute these crimes. I asked whether and what I was asking for. These are the steps we are currently taking to resolve the issue.
In her ongoing campaign to root out the illicit use of cryptocurrencies, Warren introduced the Digital Asset Anti-Money Laundering Act in December 2022, expanding the regulatory framework applicable to traditional financial institutions to include cryptocurrency companies. Digital asset wallet providers, miners, and validators must comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
Last summer, Warren once again called for stronger regulation, warning about the use of cryptocurrencies to trade fentanyl. She has also been an active supporter of the U.S. Securities and Exchange Commission’s cryptocurrency actions, saying the agency’s approval of a Bitcoin ETF in January was a misguided move.
“If the SEC allows cryptocurrencies to penetrate deeper into our financial system, it is more urgent than ever that cryptocurrencies follow basic anti-money laundering rules,” Warren wrote on Twitter.
Edited by Ryan Ozawa.
