The Use of Bitcoin in Illegal Activities Surges, According to US Treasury Report
A recent analysis released by the US Department of the Treasury has revealed a significant increase in the use of bitcoin in illegal activities, particularly human trafficking and the sexual exploitation of children. The report, based on government filings from financial firms between 2020 and 2021, identified 2,311 reported cases of crypto being used in these crimes, totaling over $412 million.
Bitcoin ATMs Facilitate Illicit Trafficking Methods
The report highlighted that victims of these crimes are subjected to forced labor, slavery, involuntary servitude, and forced engagement in commercial sex acts. The use of cryptocurrency in such illicit activities has seen a sharp rise, with 1,975 reported cases in 2021 compared to 336 cases in 2020.
“Human traffickers and perpetrators of related crimes despicably exploit adults and children for financial gain,” expressed FinCEN Director Andrea Gacki. Gacki emphasized the crucial role of financial institutions in flagging these cases and supporting law enforcement efforts to protect innocent lives.
The majority of the cases involved the exchange of cryptocurrency for “child sexual abuse material” (CSAM) on darknet marketplaces. Bitcoin ATMs and transactions through mixers were frequently used in these illicit transactions.
An analysis by Chainalysis suggests that the scale of crypto-powered child sexual abuse material networks reached its peak in 2021. This raises concerns about the prominence of alternative cryptocurrencies and transaction techniques for such purposes since then.
Treasury Urges Lawmakers to Implement Enhanced Tools
The report also highlights increased awareness and vigilance among financial institutions regarding the criminal use of cryptocurrencies. This may have contributed to the rise in reporting of crypto-related crimes over the two-year period.
In response to these findings, the US Treasury has expressed its concerns to House lawmakers, urging the implementation of enhanced legislative tools and resources to effectively combat crypto-related crimes. Brian Nelson, the Treasury’s Undersecretary for Terrorism and Financial Intelligence, emphasized the need for immediate action during a congressional hearing focused on terrorism and crypto crimes.
Addressing the Challenge of Cryptocurrency in Illegal Activities
The use of cryptocurrency in illegal activities poses a significant challenge that requires collaboration from various stakeholders. Continued monitoring and addressing of this issue are crucial to ensure the safety and well-being of vulnerable individuals.
The revelations from the US Treasury report highlight the dark side of cryptocurrency and emphasize the need for swift action to combat these crimes and protect innocent lives.
Featured image from Adobe Stock, chart from TradingView
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