The Financial Crimes Enforcement Network, or FinCEN, has issued a notice to financial institutions regarding an increase in online child sexual exploitation.
Crimes related to online child sexual exploitation, including the funding, production, and distribution of child sexual abuse materials, have increased during the COVID-19 pandemic, the notice states. Between 2017 and 2020, there was a 147% increase in online child sexual exploitation-related SAR filings, including a 17% year-over-year increase in 2020, according to FinCEN.
This increase in activity is likely due to “a confluence of factors, according to FinCEN, including:
- increased internet usage by children who are spending more time online, both unsupervised and during traditional school hours;
- restricted travel during the COVID-19 pandemic resulting in more sex offenders being online; and
- increased access to and use of technology, including encrypted communications, bulk data transfer, cloud storage, livestreaming and anonymized transactions.
Another trend is the rise in “sextortion” of minors, who are coerced or exploited into exchanging sexual images via the internet, mobile devices and social media platforms, according to the notice. Online child sexual exploitation offenders often groom minors to share or post self-generated content online in exchange for money.
SARs, in conjunction with effective implementation of other BSA requirements, are crucial to identify and stop cybercrimes. Financial institutions should provide all pertinent and available information in the SAR narrative and attachments, the notice states, and FinCEN requests that financial institutions reference only this notice in SAR field 2 (Filing Institution Note to FinCEN) using the keyword “OCSE-FIN-2021-NTC3.”
In addition to the notice, financial institutions can also refer to FinCEN’s Cyber-Events and Cyber-Enabled Crime advisory for additional resources.