U.S. Senator Elizabeth Warren (D-Mass.) is once more attacking cryptocurrency, this time linking the digital asset market to baby sexual abuse materials (CSAM).
In a bipartisan open letter to the U.S. Division of Justice and Division of Homeland Safety—cosigned by Louisiana U.S. Senator Invoice Cassidy—Warren referred to as crypto the “cost of selection for baby abuse materials.”
“We’re writing to specific our issues relating to using cryptocurrency within the unlawful commerce of kid sexual abuse materials and to acquire details about the instruments wanted by the Division of Justice and Division of Homeland Safety to finish this illicit commerce,” the senators wrote.
Within the letter, Warren and Cassidy mentioned cryptocurrency and the anonymity it offers facilitates commerce in photographs and movies depicting the sexual abuse of youngsters, pointing to a 2021 report by the Worldwide Centre for Lacking and Exploited Youngsters.
The letter additionally cited a February report by the U.S. Treasury Division’s Monetary Crimes Enforcement Community (FinCEN) that referred to as Bitcoin the “convertible digital forex” (CVC) of selection for baby exploitation and human trafficking between 2020 and 2021.
Out of two,311 reviews acquired, “2,157 reviews particularly referenced bitcoin as the first CVC used for purported [Online Child Sexual Exploitation]- and human trafficking-related exercise,” FinCEN reported. No forex was specified within the remaining filings. “From this dataset, FinCEN recognized over 1,800 distinctive Bitcoin pockets addresses associated to suspected OCSE and human trafficking offenses.”
The senators additionally talked about a current “Crypto Crime Report” by blockchain evaluation agency Chainalysis that famous privateness cash like Monero being adopted by CSAM distributors.
“Many CSAM distributors have adopted Monero in recent times, although Bitcoin is by far probably the most broadly used cryptocurrency for CSAM buying,” Chainalysis wrote. “The info suggests Monero’s position is extra prevalent in CSAM distributors’ efforts to launder their on-chain earnings, fairly than to obscure the purchases themselves.”
Chainaylsis acknowledged that it was tough to confirm Monero’s position instantly on-chain utilizing normal blockchain evaluation methods however may report on CSAM distributors’ use of Monero-friendly immediate exchanges as a proxy.
The workplace of Senator Warren didn’t instantly reply to a request for remark from Decrypt.
Warren and Cassidy set a Might 10 deadline for the Division of Justice and Homeland Safety to reply, saying it might assist guarantee Congress and the Biden Administration are doing their half to handle challenges associated to CSAM and cryptocurrency.
“Present anti-money laundering guidelines and legislation enforcement strategies face challenges in successfully detecting and stopping these crimes,” the letter mentioned. “We’re dedicated to making sure that Congress and the administration have the total suite of instruments wanted to finish CSAM and punish sellers of this materials.”
Along with asking the companies to stipulate their most urgent wants, the letter requested for a present evaluation of the position that cryptocurrency performs in facilitating CSAM, whether or not using cryptocurrency poses any distinctive challenges to efforts to determine and prosecute these crimes, and what steps they’re at the moment taking to handle them.
In her ongoing campaign to stamp out the illicit use of cryptocurrency, Warren launched the Digital Asset Anti-Cash Laundering Act in December 2022 to increase the regulatory framework that applies to conventional monetary establishments to incorporate cryptocurrency companies. Digital asset pockets suppliers, miners, and validators must adjust to Know Your Buyer (KYC) and Anti-Cash Laundering (AML) necessities.
Final summer time, Warren sounded the alarm on cryptocurrency’s use within the fentanyl commerce, once more calling for stronger laws. She has additionally been a vocal supporter of the U.S. Securities and Change Fee’s actions of cryptocurrency—and referred to as the company’s approval of Bitcoin ETFs in January the improper transfer.
“If the SEC goes to let crypto burrow even deeper into our monetary system, then it is extra pressing than ever that crypto observe fundamental anti-money laundering guidelines,” Warren wrote on Twitter.
Edited by Ryan Ozawa.