Elizabeth Warren Claims Crypto Is ‘Election Pay’ For Child Abuse

U.S. Sen. Elizabeth Warren (D-Mass.) is attacking cryptocurrency again, this time linking the digital asset market to Child Sexual Abuse Material (CSAM).

In a bipartisan open letter to the U.S. Department of Justice and Homeland Security prepared by Louisiana U.S. Senator Bill Cassidy, Warren called crypto a “child abuse option.”

“We are writing to express our concern about the use of cryptocurrency in illegal child sexual abuse materials and to seek information about the tools needed by the Department of Justice and Homeland Security to stop this illegal business,” the senators wrote. .

In the letter, Warren and Cassidy said cryptocurrency and anonymity could facilitate the trade in images and videos of child sexual abuse, citing a 2021 report by the Global Center for Missing and Exploited Children.

The letter cited a February report by the US Treasury's Financial Crimes Enforcement Network (FINCEN) that described Bitcoin as a “convertible virtual currency” (CVC) of choice for child exploitation and human trafficking between 2020 and 2021.

Of the 2,311 reports received, “2,157 reports specifically mentioned Bitcoin as the primary CVC,” he said. [Online Child Sexual Exploitation]— and activity related to human trafficking,” FinCEN reported. No currency is specified in the remaining records. “From this dataset, FinCEN identified more than 1,800 unique Bitcoin wallet addresses associated with suspected OCSE and human trafficking crimes.”

The senators cited a recent “Cryptocrime Report” by blockchain analysis firm Chinalysis that found privacy coins such as Monero to be held by CSAM providers.

“Many CSAM providers have adopted Monero in recent years, although Bitcoin is the most widely used cryptocurrency for CSAM purchases,” Chainalysis wrote. “The data suggests that Monero's role is more in efforts by CSAM vendors to mislead off-chain acquisitions than to obfuscate the purchases themselves.”

Chinailsys admits that it is difficult to directly verify Monero's role on the chain using standard blockchain analysis techniques, but can report that CSAM providers are using Monero-friendly instant exchanges as proxies.

Senator Warren's office did not immediately respond to a request for comment from Decrypt.

Warren and Cassidy set a May 10 deadline for the Departments of Justice and Homeland Security to respond, which they said would help ensure Congress and the Biden administration are doing their part to address challenges related to CSAM and cryptocurrency.

“Existing anti-money laundering laws and law enforcement mechanisms face challenges in effectively detecting and preventing these crimes,” the letter said. “We are committed to ensuring that Congress and the administration have the full tools necessary to stop CSAM and punish the sellers of this material.”

In addition to asking agencies to list their most pressing needs, the letter also called for a timely review of cryptocurrency's role in facilitating CSAM, whether the use of cryptocurrency poses any particular challenges to efforts to identify and prosecute these crimes, and what steps are currently being taken to address them.

In her ongoing crusade to stamp out illegal cryptocurrency use, Warren introduced the Digital Asset Anti-Counterfeiting Act in December 2022 to include cryptocurrency companies that target traditional financial institutions. Digital asset wallet providers, miners and validators must comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.

Last summer, Warren sounded the alarm about the use of cryptocurrency in gambling and again called for tougher regulations. She has also been a vocal supporter of the U.S. Securities and Exchange Commission's crackdown on cryptocurrency — and said the agency's approval of a Bitcoin ETF in January was a misstep.

“If the SEC allows crypto into our financial system, it is more urgent than ever that crypto adhere to basic anti-money laundering rules,” Warren tweeted.

Edited by Ryan Ozawa.