Sexual extortion of children for money rising, agency says

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OTTAWA — Canada's Financial Intelligence Agency is warning of an increase in child sexual extortion for profit, activities that are often linked to organized crime.

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This type of online blackmail involves threatening to distribute sexual images or videos of the victim unless they send the criminals money or, in some cases, additional photos.

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In a recently issued alert, the Financial Transactions and Reports Analysis Center of Canada advises banks and other businesses to closely monitor specific transactions and patterns that may indicate extortion or other forms of child sexual exploitation.

The federal agency, known as Fintrac, identifies cash linked to money laundering by analyzing millions of pieces of information each year from banks, insurance companies, securities dealers, money services businesses, real estate brokers, casinos and others.

The Center discloses collected information to law enforcement and security partners, including the RCMP and other police services.

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The new alert is based on strategic intelligence published by Fintrac in December 2020, reflecting recent developments and lessons learned.

He supports Project Shadow, a project led by Scotiabank and the Canadian Child Advocacy Center, which includes international financial intelligence units, law enforcement agencies and private sector partners.

Fintrac says it provided 57 financial disclosures to law enforcement in support of Project Shadow in 2024-25. As a result of the disclosure of information, 157 objects of interest were identified, the agency adds.

“Online sexual exploitation of children is an alarming global crime targeting children that continues to grow year on year, not only in the number of substantiated reports showing images of child sexual abuse, but also in the severity of the images and videos,” the warning said.

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“Motivations for sexual exploitation of children vary, and while most offenders sexually exploit children for sexual gratification rather than financial gain, recent years have seen an increase in crimes motivated by financial considerations, including cases of sexual extortion.”

A Fintrac analysis of online child sexual exploitation transactions found that almost all suspected perpetrators were male. They were engaged in a variety of professions or called themselves pensioners, the majority of them were between 20 and 60 years old.

The alert notes that the Canadian Child Advocacy Center says offenders have used social media platforms to impersonate a young person, build rapport and entice the victim to send a nude image or video.

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Once the images are published, the perpetrator will blackmail the victim, demanding money or goods such as gift cards or additional images to prevent the photos from being shared publicly or among family and friends, the alert states.

Fintrac says that according to sources consulted by Cybertip, the national hotline for reporting online child sexual abuse, demands for money are known to be coming from international organized crime networks.

“Cybertip also highlights that boys are often targeted for financial sexual extortion, while girls are more likely to be extorted for additional images,” the alert states.

Fintrac lists various indicators related to possible child exploitation online. It says signs of sexual extortion may include quickly emptying an account through email money transfers, online gift card purchases or sending funds to peer-to-peer funds transfer platforms.

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In some cases, transaction notes contain links that suggest funds were extorted from senders, including links to explicit material or pleading language such as “please stop” or “remove video.”

Fintrac states that some countries may be of interest to sex offenders due to their economic status, lack of legislation to protect at-risk individuals or relative proximity to Canada.

High-risk jurisdictions include the Philippines, Thailand, India, South Africa, Dominican Republic, Mexico and Cuba, the alert said.

Fintrac also noted an increase in online purchases of child sexual exploitation material using virtual currencies, often by men in their 20s and 30s.

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