Elizabeth Warren Calls for a Crackdown on Crypto’s Role in Child Sexual Abuse

U.S. Senators Elizabeth Warren and Bill Cassidy have called on the Justice Department and Department of Homeland Security to redouble efforts to stop the use of cryptocurrency to pay for child sexual abuse material online, a problem they say is worsened.

In a letter sent Thursday to Attorney General Merrick Garland and Secretary of Homeland Security Alejandro Mayorkas, the senators claim that the “pseudonymity” provided by crypto transactions helps those trading in CSAM evade detection by law enforcement agencies.

Citing data from the U.S. Treasury Department’s Financial Crime Enforcement Network and research from Chainalysis, a company that specializes in detecting crypto transactions, and the Internet Watch Foundation, a CSAM-focused charity, the letter claims that it “ Use of cryptocurrency in illegal trading in CSAM appears to be increasing.”

Between 2020 and 2022, financial institutions identified 1,800 bitcoin wallets suspected of transactions related to child sexual exploitation or human trafficking, the letter said. Although the size of the crypto-based market for CSAM declined in 2023, Chainalysis found, an increase in sophistication among merchants allowed them to evade detection for much longer than in previous years.

The people participating in CSAM trading online use various methods to conceal their activities, the senators allege, including using crypto-mixing services and ATMs to conceal the origin of the funds used in CSAM transactions and to launder the proceeds to wash.

“These are deeply disturbing findings that reveal the extent to which cryptocurrency is the payment of choice for perpetrators of child sexual abuse and exploitation,” the senators wrote.

To spark a response, Warren and Cassidy have asked the DOJ and DHS to publish details of their own investigation into the scope of crypto’s role in the CSAM problem, as well as information on the challenges specifically for the prosecution of this category of crime. Senators have given agencies until May 10 to respond to their questions.

Due to her frequent and articulate criticism of cryptocurrency and its role in illegal activities, Warren has become something of a villain in cryptocurrency circles. Lately, the senator has been criticized for a piece of anti-money laundering legislation she proposed in July 2023 that the Chamber of Digital Commerce, a crypto advocacy group, has claimed will “wipe out hundreds of billions of dollars of value to the US.” startups and decimate the savings of countless Americans who have legally invested in this asset class.”

Warren has reiterated her position that the crypto industry must follow the same strict rules as other financial organizations in the US to prevent abuse by criminal actors, including CSAM vendors.