On February 13, 2024, FinCEN issued a Financial Trend Analysis (FTA) reflecting an increase in BSA reporting associated with the use of convertible virtual currency (CVC) and online child sexual exploitation (OCSE) and human trafficking, covering the period from January 2020 to December 2021. According to FinCEN, they received a total of 2,311 BSA reports referencing CVC in connection with OCSE and human trafficking, totaling over $412 million in reported suspicious activity.
FinCEN’s analysis initially focused on human trafficking-related activity associated with CVC. However, FinCEN’s review showed that the majority of BSA reports that identified CVC associated with human trafficking also identified OCSE- and child sexual abuse material (CSAM)-related activity. Key findings of their analysis include the following:
The total number of OCSE- and human trafficking-related BSA reports involving CVC increased from 336 in 2020 to 1,975 in 2021;
BSA filers specifically reported child sexual abuse material (CSAM) or human trafficking and CSAM in 95 percent of the OCSE- and human trafficking-related BSA reports involving CVC;
BSA reports overwhelmingly identified bitcoin as the primary CVC used for purported OCSE- and human trafficking-related activity, however, this does not necessarily mean that other types of CVC are not used for such crimes; and
FinCEN identified four typologies (i.e. the use of darknet marketplaces that distribute CSAM, peer-to-peer exchanges, CVC mixers, and CVC kiosks) that describe common trends within BSA reports related to OCSE and human trafficking.
Read FinCEN’s press release here.
The Financial Trend Analysis can be found here.