OTTAWA — Canada’s financial intelligence agency has issued a warning about a growing trend of sexual extortion targeting children for financial gain. This alarming form of online blackmail involves threats to share sexual images or videos of victims unless they pay the perpetrators, often in cash or by sending additional explicit content.

The Financial Transactions and Reports Analysis Centre of Canada, known as Fintrac, released a new alert advising banks and businesses to monitor specific transactions that may indicate extortion or other forms of child sexual exploitation. Fintrac analyzes millions of data points from various financial institutions, including banks, insurance companies, and casinos, to identify cash linked to money laundering and other illicit activities.

This latest alert builds on strategic intelligence shared by Fintrac in December 2020, incorporating new developments and insights. It supports Project Shadow, a collaborative initiative led by Scotiabank and the Canadian Centre for Child Protection, which involves international financial intelligence units and law enforcement agencies.

In the 2024-25 period, Fintrac reported generating 57 financial intelligence disclosures to law enforcement in support of Project Shadow, identifying 157 subjects of interest. The agency noted, "Online child sexual exploitation is a disturbing global crime targeting children that continues to rise year after year, not only in the number of confirmed reports showing child sexual abuse images, but also in the severity of the images and videos."

While many offenders exploit children for sexual gratification, there has been a notable increase in cases motivated by financial gain, including sexual extortion. Fintrac's analysis indicates that nearly all suspected perpetrators are male, with a diverse range of occupations and ages primarily between their late 20s and 60s.

The Canadian Centre for Child Protection has reported that offenders frequently use social media to pose as young individuals, establishing trust with victims to solicit nude images or videos. Once these images are received, the offenders blackmail the victims, demanding money, gift cards, or additional explicit content to prevent the images from being shared publicly.

According to Cybertip, a national reporting line for online child sexual abuse, demands for money often originate from international organized crime networks. The alert highlights that boys are frequently targeted for financial sexual extortion, while girls are more often coerced into providing additional images.

Fintrac has outlined several indicators that may suggest online child exploitation, including rapid depletion of bank accounts through email money transfers, online gift card purchases, or funds sent via peer-to-peer transfer platforms. Transaction notes may also contain explicit references or pleas for help, such as "please stop" or "delete the video."

Certain countries are identified as high-risk for sex offenders due to economic conditions, inadequate protective legislation, or proximity to Canada. These include the Philippines, Thailand, India, South Africa, the Dominican Republic, Mexico, and Cuba. Additionally, there has been an increase in the use of virtual currencies for purchasing child sexual exploitation material, predominantly by men in their late 20s to 30s.