An analysis by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) revealed a sharp increase in the use of cryptocurrencies for illegal transactions related to human trafficking and exploitation in 2021.
FinCEN reported 2,311 crypto uses for such crimes over the two years of 2020 & 2021, totaling over $412 million. Reports jumped from 336 in 2020 to 1,975 in 2021.
The agency stated that Bitcoin was the predominant cryptocurrency used in these cases. The majority involved exchanging crypto for child sexual abuse material (CSAM) on darknet platforms using crypto kiosks or mixers to obscure transactions.
FinCEN Director Andrea Gacki said financial institutions reporting suspicious activity assist law enforcement in protecting victims. Crypto intelligence firm Chainalysis noted that CSAM crypto transactions peaked in 2021 before declining.
The agency suggested that raised vigilance around crypto crime may have contributed to the uptick in reports. However, the data examined is over two years old, predating recent crypto market trends.
Methods and patterns of illicit crypto use have likely shifted since then. Nonetheless, the report underscores the ongoing role of cryptocurrencies in enabling human exploitation and the need for continued monitoring by financial institutions.
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