February 1, 2018 |
Lawmakers at a Tuesday hearing discussed ways to crack down on human traffickers who are using new financial tools to avoid detection.
The House Financial Services Subcommittee on Oversight and Investigations heard from witnesses on the increasing use of cryptocurrencies and encrypted communications, including on smartphones, that make it harder for authorities to catch traffickers.
“The lifeblood of human trafficking is the ability to transfer money,” said Rep. Ann Wagner (R-Mo.). “While money has historically been transmitted using remittance services and funnel accounts, the use of prepaid cards and cryptocurrency create an unforeseen challenge for financial regulators.”
“The means and methodology by which compensation is being received is changing,” said Rep. Al Green (D-Texas), the subcommittee's top Democrat. “People have the ability with cryptocurrency of transferring [money] without the trail we are customarily looking for, so we have to change our strategy.”
Human trafficking generates an estimated $150 billion per year, according to the International Labor Organization, with commercial sexual exploitation accounting for $99 billion of that total.
But law enforcement and financial institutions are taking new steps to track traffickers, including sophisticated algorithms that can detect online trafficking behavior.
Louise Shelley, a professor at George Mason University, told lawmakers about one such example, where sexual services were purchased at night under the guise of an online beauty salon transaction. Algorithms, however, would recognize a manicure purchased at 2 a.m. for $100 as a red flag for suspicious behavior.
“Implementing these new measures can move reporting rates on human trafficking cases from a 15 percent success rate [with standard reporting] ... to an 85 percent success rate in case detection,” Shelley said.
Transactions made with digital currency, however, are proving more difficult to trace.
New York County District Attorney Cyrus Vance Jr. said his office has expanded where it searches for trafficking activity, both on the internet and the deep web, where cryptocurrency transactions are increasingly prevalent.
The district attorney said that trafficking sites on the deep web have seen their profits skyrocket thanks to the “drastic increase in the value of digital currencies such as bitcoin” in recent months.