U.S. Senator Elizabeth Warren (D-Mass.) is attacking cryptocurrencies again, this time linking the crypto market to child sexual abuse material (CSAM).
In a bipartisan open letter to the US Department of Justice and the Department of Homeland Security, co-signed by Louisiana Senator Bill Cassidy, Warren called cryptocurrencies “the preferred payment method for child abuse material.”
“We are writing to express our concerns about the use of cryptocurrency in the illegal trade in child sexual abuse material and to obtain information about the tools needed by the Department of Justice and the Department of Homeland Security to end this illicit trade.” , the senators wrote.
In the letter, Warren and Cassidy said that cryptocurrencies and the anonymity they provide facilitate the trade of images and videos depicting the sexual abuse of children, referencing a 2021 report from the International Center for Missing and Exploited Children.
The letter also cited a February 2021 report from the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) that called Bitcoin the “convertible virtual currency” (CVC) of choice for child exploitation and trafficking. of people between 2020 and 2021.
Of the 2,311 reports received, “2,157 reports specifically mentioned Bitcoin as the primary CVC used for activities allegedly related to [Explotación Sexual Infantil en Línea] and human trafficking,” FinCEN reported. No currency was specified in the remaining reports. “From this data set, FinCEN identified more than 1,800 unique Bitcoin wallet addresses related to alleged OCSE crimes and trafficking.” people”.
The senators also mentioned a recent “Crypto Crime Report” by blockchain analysis firm Chainalysis that noted that privacy cryptocurrencies like Monero are being adopted by CSAM vendors.
“Many CSAM sellers have adopted Monero in recent years, although Bitcoin is by far the most widely used cryptocurrency for purchasing CSAM,” Chainalysis wrote. “The data suggests that Monero’s role is more prevalent in CSAM sellers’ efforts to launder their on-chain profits, rather than to conceal the purchases themselves.”
Chainalysis acknowledged that it was difficult to directly verify the role of Monero on-chain using standard blockchain analysis techniques, but was able to report on the use of Monero-friendly instant exchanges by CSAM vendors as a proxy.
Senator Warren’s office did not immediately respond to a request for comment from Decrypt.
Warren and Cassidy set a deadline of May 10 for the Department of Justice and Homeland Security to respond, saying it would help ensure Congress and the Biden Administration are doing their part to address challenges related to CSAM and cryptocurrencies.
“Existing anti-money laundering regulations and law enforcement methods face challenges in effectively detecting and preventing these crimes,” the letter says. “We are committed to ensuring that Congress and the administration have all the tools necessary to end CSAM and punish sellers of this material.”
In addition to asking agencies to describe their most pressing needs, the letter requested a current assessment of the role cryptocurrencies play in facilitating CSAM, whether the use of cryptocurrencies poses unique challenges to efforts to identify and prosecute these crimes, and what measures are currently being taken to address them.
In her continued crusade to eradicate the illicit use of cryptocurrencies, Warren introduced the Anti-Digital Asset Laundering Act in December 2022 to expand the regulatory framework that applies to traditional financial institutions to include cryptocurrency companies. Digital asset wallet providers, miners, and validators would have to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
Last summer, Warren sounded the alarm about the use of cryptocurrencies in the fentanyl trade, again calling for stricter regulations. She has also been a vocal supporter of the US Securities and Exchange Commission’s actions on cryptocurrencies, calling the approval of Bitcoin ETFs in January the wrong move.
“If the SEC is going to allow crypto even further into our financial system, then it is more urgent than ever for crypto to follow basic anti-money laundering rules,” Warren wrote on Twitter.
Edited by Ryan Ozawa.
