Sens. Warren and Cassidy pen letters to DOJ warning of crypto's use in trading of child sexual abuse material

Sens. Elizabeth Warren and Bill Cassidy are seeking information from the Department of Justice and the Department of Homeland Security on what they're doing to block crypto from being used as payment in the trading of child sexual abuse material.

The Massachusetts Democrat and Louisiana Republican sent a letter on Thursday to Attorney General Merrick Garland and Secretary of Homeland Security Alejandro Mayorkas, asking what tools they had and needed to resolve the issue.

“The pseudonymity provided by cryptocurrency has allowed the payments for CSAM [child sexual abuse material] to 'move quickly into the crypto world,' and we are committed to ensuring that Congress and the Administration have the full suite of tools needed to end CSAM and punish sellers of this material,” Warren and Cassidy wrote in their letter .

Reports

The two senators cited multiple reports showing an increase in activity, including a January report from blockchain forensics firm Chainalysis that said crypto-based sales of child sexual abuse material are an increasing issue.

"Overall, our data suggests that while the size of the crypto-based CSAM market has decreased in 2023, the sophistication of CSAM sellers and in turn their resilience to detection and takedowns has increased over time," Chainalysis said in the report .

Warren and Cassidy also cited a report from Treasury's Financial Crimes Enforcement Network from 2020-2021 that said, "perpetrators of OCSE [online child sexual exploitation] are increasingly using CVC [convertible virtual currency] to try to avoid detection."

The senators sent the two a list of questions about whether the use of crypto to pay for child sexual abuse material posed "any unique challenges" as they go after bad actors. They also asked what additional tools both departments need to address the issue. A response is due by May 10.

Warren, who has been critical of crypto, has been vilified by the crypto industry over the past few years. Warren has a bill on the table that would crack down on the alleged use of crypto in illicit finance and aims to extend Bank Secrecy Act requirements, including know-your-customer rules, to miners, validators, wallet providers and others.

The crypto industry has pushed back on Warren's bill and has sought clarifications on crypto's role in illicit finance.