U.S. Crackdown on Cryptocurrency-Fueled Child Abuse Trade

The United States is cracking down on child sexual abuse material (CSAM) that is being bought and sold for cryptocurrencies.

U.S. Senators Elizabeth Warren and Bill Cassidy introduced legislation Tuesday that would make sure federal agencies have everything they need for tracking crypto transactions connected to the sale of child abuse content.

These acts were an initiative to terminate CSAM in which the current technical capacity of the Department of Justice (DOJ) and the Department of Homeland Security (DHS) were requested to be disclosed.

In fact, a Chainalysis study presented to senators in January 2024 detailed a growing use of cryptocurrency in the illicit trade of CSAM. The findings showed that.

Chainalysis has found that sellers of child abuse materials are using "mixers" and "privacy coins" such as Monero, Monero, to clean their earning and not get caught by law enforcement.

The U.S. senators asked the attorney general and the secretary of homeland security about the current capabilities that DOJ and DHS have at their disposal to identify and prosecute those crimes.

"Existing Anti-Money Laundering (AML) rules, along with law enforcement methods, find challenges in effectively detecting and preventing these crimes. The letter contained six questions whose answers are to gauge the independent findings that Federal agencies had discovered; that cryptocurrency is linked to CSAM. The rest are to gauge the need for new tools to identify and prosecute the sellers and buyers.

The senators asked the questions to be answered by May 10.

However, the ability of the DOJ to technically look through crypto transactions at present has kind of played a role in this whole drama whereby a cryptocurrency exchange KuCoin and two of its founders are to be indicted.

The DOJ has indicted KuCoin and its two co-founders for "conspiring to operate an unlicensed money transmitting business" and "conspiring to commit money laundering" under both BSA laws and USA PATRIOT. "

The defendants effectively allowed KuCoin to run its business in the shadows of financial markets and be used as a haven for dirty money through money laundering by not implementing even basic Anti-Money Laundering policies. The Justice Department said KuCoin had received more than $5 billion in transactions that involved "suspicious and criminal funds" and had transferred or laundered out more than $4 billion."