HEADER GLOBAL GOES FINANCIAL HERECRIME REVIEW
How FIs can disrupt sextortion financial mechanisms
Monetizing sextortion of kids is a multistep process involving numerous actors, financial products and FIs. The complexity provides opportunities for FIs to prevent and detect sextortion financial flows to help thwart this crime.
Prevention
While detection and reporting are key to countering financial sextortion of minors, these steps occur after the harm has been done.
Safety by Design considers and designs safety into user-facing tech( including financial technology) products. Applying Safety by Design to teen financial accounts may include empowering users through tailored controls and parental notifications, embedding educational and support resources, surfacing safety concerns through simple, age-appropriate reporting and high-default privacy settings. 16
Detection
A recent Financial Action Task Force report on online child exploitation provides dozens of potential indicators of financial sexual extortion of children that should be evaluated holistically. 17
Key indicators are listed below:
General indicators
▪ P2P transactions conducted between two individuals where there is no apparent relationship
▪ Teen-sponsored accounts sending funds to adult accounts
▪ Transaction recipient is not local to the sender
▪ Transaction purpose refers to social media or social media usernames, sexual or pornographic terms, threatening / pleading language or date / time that material was received
Victim transactions
▪ The remitter( victim) does not enter a payee name or enters a name that does not match the actual account holder.
▪ Transactions conducted by teenage boys ranging from $ 75 to $ 1,500 dollars in round dollar amounts.
▪ Transactions quickly deplete the account and typically occur between 7 p. m. to 7 a. m.
▪ Transactions consist of uncharacteristic purchases of digital gift cards, gaming credits or cryptocurrency.
Perpetrator transactions
▪ The perpetrator’ s account receives multiple unlinked transactions or unlinked rationales for the transactions and the amounts are quickly removed from the account.
As this scheme is conducted by transnational criminal groups and leverages complicit, unwitting and coerced money mules, it is imperative that FIs recognize networks of accounts working together to consolidate and launder funds.
Moreover, professional money launderers intermingle funds generated from various scams when remitting illicit proceeds overseas. For example, an investigator may originally investigate an account for suspected business email compromise but uncover that the account also received scores of low dollar transfers from P2P and payment apps.
Hopefully, the investigator now understands that these smaller P2P transactions may be linked to the financial sextortion of minors.
Reporting
FinCEN: The Financial Crimes Enforcement Network( FinCEN) published Notice FIN-2021-NTC3 titled“ FinCEN Calls Attention to Online Child Sexual Exploitation Crimes [ OCSE ],” 18 providing FIs with OCSE-specific suspicious activity report filing instructions and highlighted financial trends related to OCSE.
In February 2024, FinCEN released a Financial Trend Analysis regarding OCSE that provides cryptocurrency-related typologies of OCSE that may also be indicative of financial sextortion. 19
NCMEC: The NCMEC CyberTipline is a designated reporting mechanism for the public and electronic service providers to report instances of suspected child sexual exploitation. Some FIs have begun reporting financial sextortion to the NCMEC CyberTipline in addition to FinCEN. For example, in 2024, Block and PayPal reported 1,176 and 868 leads respectively to the CyberTipline. 20
Conclusion
But for the ability to monetize the sextortion of children, both the amount of explicit imagery and the number of children exploited would be lower. FIs can help root out this horrible crime by disrupting the financial motivation and the mechanisms driving the huge increase in cases.
Resources for victims and parents
Take it down. 21 NCMEC’ s service to help remove online nude or explicit photographs or videos taken before age 18.
Sextortion: What parents should know 22
Alison Jimenez, CAMS, president / founder, Dynamic Securities Analytics Inc. ajimenez @ securitiesanalytics. com, 86 acamstoday. org