Cryptocurrencies Facilitate an Already Murky Human Trafficking Problem

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A House committee hearing spotlit the problematic combination of the usage of virtual currencies and a lack of data surrounding human trafficking in the U.S.

Emerging technologies—specifically cryptocurrencies—aid human traffickers’ business operations, and a lack of accurate data makes it challenging for law enforcement to keep up, according to witnesses who testified before the House Committee on Science, Space and Technology on Tuesday.

Witness Gretta Goodwin, director of the U.S. Government Accountability Office’s Homeland Security and Justice team, said that the use of advanced technologies exacerbates the preexisting problem of low data visibility regarding victims of human trafficking and exploitation. 

“There is no reliable estimate on the number of trafficking victims in the US or about the money generated by this crime. The quality and quantity of the data are often hampered by the hidden nature of the crime, challenges to identifying individual victims, gaps in data accuracy and completeness and significant barriers regarding the sharing of information,” Goodwin said in opening comments. “Adding the use of virtual currencies into this mix, which can be used to purposely conceal illicit transactions, makes it tougher to develop reliable estimates.”

Goodwin’s comments follow the simultaneous release of a report by GAO documenting the rise in usage of virtual currencies in human trafficking. The inherent nature of cryptocurrencies––which are not pinned to any government fiat nor have a tangible component––makes them difficult to trace. This anonymity makes virtual currencies a useful tool for conducting illegal business activity. 

“Because the technology is rapidly expanding and rapidly being used, it has been challenging for law enforcement to keep pace,” she said. 

Goodwin and several other witnesses also noted that aside from digital currencies, other emerging technologies, specifically artificial intelligence, could be useful in tracking and combating human trafficking. Partnerships between private companies and federal agencies––a key pillar in the Biden administration agenda––could help.

Per GAO’s report, using machine learning to locate individuals engaging in transactions at virtual currency kiosks could assist trafficking investigations and remove some of the anonymity surrounding crypto transactions. 

This could generate more accurate data analytics and help law enforcement better track instances of human trafficking. Currently, Goodwin estimates that there are more illicit transactions occurring than formally recorded. 

“Based on the work that we’ve done, we know that the numbers are probably not complete, and so I would suspect that those numbers are much higher,” she said, adding that more data and information is needed on suspicious virtual currency transactions to link to potential human trafficking.

She added, however, that there have to be measures in place to protect victims’ privacy. 

“What we know from the virtual currencies work that we did, you know, certain law enforcement agencies are partnering with data analytics groups and other groups to gain a little more…information about how to spot these types of illicit activity and to become more knowledgeable on the topic,” Goodwin noted. “So there are partnerships that are occurring with law enforcement and some of the business or analytic groups.”

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