In a joint effort to combat the illicit trafficking of child sexual abuse material (CSAM), US senators Elizabeth Warren and Bill Cassidy have written a letter to the US Department of Justice (DOJ) and Department of Homeland Security (DHS) expressing concern about the alleged use of crypto to facilitate these activities. 

In the letter, the senators highlight the “pseudonymity” provided by cryptocurrencies, which they say has enabled the rapid movement of payments for CSAM into the crypto world.

It was also stated that both Warren and Cassidy are committed to ensuring that Congress and the Administration have the tools necessary to end CSAM and hold those responsible for its distribution accountable.

The legislators’ concerns are based on a January 2024 report from blockchain analytics firm Chainalysis, which identifies cryptocurrency-based sales of CSAM as “a growing problem.” 

The report reveals that virtual currency has become the preferred payment method for buyers and sellers of commercial child sexual abuse content. Additionally, a Financial Trend Analysis by the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) indicates an increasing trend of perpetrators using convertible virtual currencies to evade detection.

The senators cite troubling findings from FinCEN, which discovered thousands of suspicious activity reports related to online child sexual exploitation and human trafficking offenses involving Bitcoin. 

These reports allegedly identified over 1,800 unique Bitcoin wallet addresses associated with suspected offenses, with CSAM being specifically mentioned in 95% of the cases.

The senators further pointed out that Homeland Security investigators played a critical role in the indictment of a South Korean national and numerous users in the United States for operating a dark web pornography site funded by Bitcoin.

However, legislators note that the use of cryptocurrency in CSAM’s illicit trade appears to be increasing.

The Chainalysis review further reveals that while the size of the crypto-based CSAM market has decreased, sellers have become more “sophisticated and resilient” to detection and takedowns. According to the report, Bitcoin remains the most widely used cryptocurrency for purchasing CSAM.

To address these challenges, Senators Warren and Cassidy asked the DOJ and DHS a series of questions, seeking clarification on their current assessment of the alleged cryptocurrency’s role in facilitating CSAM, the sophistication of CSAM sellers, and the “unique challenges” posed by the use of crypto as payment in these crimes. 

They also inquire about the agencies’ steps to combat CSAM sellers’ use of cryptocurrency, privacy coins, and obscurification methods.

Senator Warren’s previous efforts include introducing the Digital Asset Anti-Money Laundering Act, a bipartisan bill to counter illegal activities and misuse of digital currencies. 

The bill seeks to bring the digital asset ecosystem into “greater compliance” with anti-money laundering and counter-terrorism financing frameworks.

Featured image from Shutterstock, chart from TradingView.com

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