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Crypto Companies, Law Enforcement and Intelligence Firms Team Up to Fight Human Trafficking

05/12/2020

Crypto companies, intelligence firms and law enforcement agencies team up to fight human trafficking through data sharing and educational awareness.

It may seem like an unlikely combination, but crypto companies and law enforcement agencies are joining forces to combat a major global crime: human trafficking.

The Anti-Human Trafficking Intelligence Initiative (ATII) launched a cryptocurrency consortium last month to fight human trafficking by analyzing data generated from crypto transcations, along with raising educational awarness around these horrendous sex crimes.

Aaron Kahler, chair and founder of ATII, told Cointelegraph that ATII launched its anti-human trafficking cryptocurrency consoritum (ATCC) with the goal of bringing together industry leaders in the cryptocurrency realm to standardize information related to human trafficking. He said:

“We’ve seen a lot of data on drug trafficking, crime, terrorist financing, ransomware and more, but the world doesn’t have enough information on human trafficking.There is so much of this going on in today’s dark market, a place where we also see a lot of crypto transactions happening.”

According to Kahler, who serves as the chairman of ATCC, intelligence firms and cryptocurreny orginzations are partnering to raise awareness around red flags related to human trafficking. This includes sex trafficking and child abuse, both of which Kahler belives there isn’t enough focus on when it comes to gathering useful data to combat these tragic events. 

Gathering the data 

According to The National Human Trafficking Hotline, over fifteen-hundred sex trafficking cases occured in the U.S during 2018. This represents a 25% increase in human trafficking cases in the U.S. from 2017. 

Kahler noted that large intelligence organizations like CipherTrace and Blockchain Intelligence Group, along with major exchanges such as Bitfinex, and crypto ATM provides, like DigitalMint, have joined ATCC with the intention of sharing information and compiling data to better combat human trafficking.

According to Kahler, ATCC wants to ensure the sharing of information in a way similar to section 314b of the U.S. Patriot Act, which states that law enforcement, regulators and financial institutions can legally share information regarding terrorism or money laundering to help combat these crimes. 

ATCC’s goal is to get exchanges, law enforcement, data providers and the like to legally share this type of information to fight human trafficking, child exploitation and child sexual abuse material together. Kahler told Cointelegraph:

“We are starting these types of conversations and relationship within the consortium through the building of typologies, red flags and other identifiers and investigation techniques to begin practicing corporate social responsibility around anti-human trafficking and encouraging the rest of the industry to do the same.”

How it works

Once suspicious behavior has been detected and validated, the two law enforcement agencies that are part of ATCC are notified. Kahler mentioned that ATCC plans to have a total of five law enforcement firms on board by the end of 2020, along with a total of eight cryptocurrency exchanges. 

Pamela Clegg, CipherTrace’s director of financial investigations and education and a former United States intelligence officer, told Cointelegraph that combating human trafficking has been difficult due to the sparse amounds of data available. 

Although some instances of human trafficking have been linked to crypto transactions, Clegg noted that understanding how these events are tied together has been especially challenging due to a lack of information. She said:

“Tracing human trafficking through cryptocurrency has not been a great area of success. This is because we don’t have the initial starting data to know if these transactions are indeed related to human trafficking. Once we’ve identified these transactions though, we can build out a network to combat these crimes – but we need an initial starting point.”

As an ATII and ATCC member, CipherTrace allows the other members access to the firm’s blockchain analysis software to carry out investigations. CipherTrace also shares cryptocurrency exchange data with the consortium. 

Another ATCC member, identity intelligence company 4iQ, helps assist companies across the world with identity theft and data breach cases. Luke Wilson, 4iQ’s VIP of intelligence, told Cointelegraph that on average the firm sees 7 to12 data breaches daily and has access to over 25 billion global identity records.

As part of ATCC, Wilson explained that 4iQ is specifically working to help unmask and demystify bad actors in the human trafficking realm. He said:

“We are a threat intelligence company, but we also have a lot of crypto-related data. The dark web runs on crypto in many instances and when those sites get breached, we gain access to that data. We can then use that data to catch the bad guys.”

In addition to a plethora of data, 4iQ provides ATCC members access to its IDHunt Core tool, which is used to uncover identities behind criminal activities. The firm also uses tools to trace crypto transactions, gaining access to insights such as crypto addresses, IP addresses, messages between buyers and sellers and more. “You can monitor this information to see everything to better understand what is going on and to uncover identities,” Wilson said.

Recognizing the red flags

Yet even with advanced tools and data, Clegg explained that the educational element CipherTrace brings to ATCC is extremely beneficial. She said:

“CipherTrace is bridging the gap between law enforcement, crypto exchanges and non-profits on the topic of human trafficking. We help these orginzations understand what type of transcational patters they should be looking for that can determine human trafficking.”

Specifically, Clegg pointed out that micro transactions made using cryptocurrency is one facilitator of human trafficking. She explained that child abuse material, for example, can easily be exchanged through cryptocurrency micro payments, where small amounts of money are transferred between individuals. She said:

“Cryptocurrency micro payments allow criminals to build and expand their customer reach, while still generating income by charging less. This also makes material more accessible. I know that there are places in the world that accept crypto payments for prostitution.” 

Teresa Anaya, BSA/AML Officer at TrustToken, another ATCC member, also mentioned that cryptocurrency micro payments could help determine human trafficking crimes. She told Cointelegraph:

“Coming from a traditional financial background, where I once conducted investigations for Standard Chartered Bank, I’ve noticed that in traditional banking, many times orginzations only look at large transactions in human trafficking cases. However, in these instances, transactions could be as low as $3.” 

Anaya noted that TrustToken, the company behind the TrueUSD (TUSD) stablecoin, joined ATCC to help organizations identify patterns in cryptocurrency transactions and build a detection scenario using the firm’s software to monitor those patterns. Unlike CipherTrace, TrustToken does not share any user or exchange data, but rather builds a relationship with the other members to determine how to best detect and combat human trafficking activities. 

Additionally, Anaya pointed out that cryptocurrency may be appealing for human trafficking crimes due to the fact that its borderless. Unlike fiat transactions, she noted that cryptocurrency can be tracked from the moment it was minted to the last address it was received at. She said:

“If you are working on an investigation in traditional banking you have bank accounts involved. A transaction usually goes from one bank account to another, and a stop or pause is usually involved. This also means that sometimes an investigation can stop because you are unable to obtain records from banks, but this isn’t the case with crypto.”

Case in point

Seth Sattler, director of compliance for bitcoin ATM provider DigitalMint, told Cointelegraph that it would be naive to think that cryptocurrency isn’t being used in some capacity for human trafficking. He said:

“Cryptocurrency is becoming the preferred method of payment for websites that cater to the human trafficking industry, such as advertisement sites, dark web marketplaces, and adult film sites, monitoring of an individual’s use of crypto will inevitably always be a huge part in investigating, mitigating, and hopefully preventing human trafficking.”

Sattler further noted that in addition to looking at crypto transactions, DigitalMint has access to video footage that can detect suspicious behavior. He explained that in addition to routine small late-night purchases, footage of a female making a transaction at a bitcoin ATM with a male present, or a customer being on the phone while transacting are red flags. He added:

“More traditional red flags associated with human trafficking may include numerous purchases at female clothing stores, travel sites, and hotels. The crypto transactions in the account should be viewed as additional red flag suggesting human trafficking.”

Moreover, Kahler mentioned that human trafficking has become one of the most profitable crimes in the world and is often a predicate crime to money laundering. 

Making sense of everything 

While ATCC may include competing crypto organizations and an unusual mix of law enforcement agencies, Kahler stressed the important of all these companies coming together to fight human trafficking.  

For example, Kahler noted that Bitfinex, a leading cryptocurrency exchange and member of ATCC, is sharing crypto transactions and uses cases they see in the industry to raise red flags around suspicious activity. 

Additionally, Blockchain Intelligence Group, which has developed a blockchain-agnostic search and analytics engine, is providing forensic tools and access to unsavory wallet addresses, and sharing that information with the consortium. 

Clegg from CipherTrace noted that even though many of the organizations involved with ATCC are “competitors,” they all share the same goal of combating human trafficking. She said:

“At some point we are all competitors, but at end of day we all want to fight this plague on human trafficking together. This is a global issue with staggering numbers and it’s something we’ve seen institutions pay attention to, but we really need to work together to combat this moving forward.”