Criminal Law

Discourse around online child sexual exploitation usually centres around social media platforms, encrypted messaging apps and the dark web. But as technology becomes more sophisticated, so do the means of exploitation, and one of the more novel ways in which exploitation is facilitated is through payment platforms.

From PayPal, Cash App, Venmo and crypto wallets to “creator tipping” systems, gaming currencies, and even gift-card systems, payment tools that were never designed for child safety are being weaponized to: pay minors for sexually explicit images or videos; incentivize grooming exchanges; reward compliance; disguise the purchase of child sexual abuse material (CSAM); launder proceeds of exploitation; and connect with networks of offenders via coded transactions.

Consequently, enforcement agencies around the world have reported a sharp rise in financial transactions linked to CSE, and several jurisdictions have already prosecuted offenders who used simple digital payments to buy child abuse material from minors overseas.

Meanwhile, in Australia, the Australian Centre to Counter Child Exploitation (ACCCE) has confirmed a 41% increase in exploitation reports in the past year, a significant portion of which can be attributed to money flows across digital platforms.

In fact, after conducting a spot check on 15 online payment platforms to see if the businesses were flagging and reporting suspicious transactions, the Australian Transaction and Reports Analysis Centre (AUSTRAC) “easily” found 45 customers it suspected of sending money overseas to watch children be sexually abused, both live and in pre-recorded material[web:6].

The Means of Exploitation

The use of payment platforms to facilitate child exploitation is not monolithic. The means of exploitation are varied and increasingly becoming more complex. Some of the more common means include:

Tipping minors for sexual conduct

Creator economy features like tipping, tokens, or “gifts” on platforms such as TikTok, gaming streams or live chat tools are increasingly exploited by offenders, with payments as small as $5-10 being used to encourage minors to send explicit images, escalate demands, create financial dependency, and normalise the grooming dynamic.

Buying CSAM via peer-to-peer transfers

Encrypted or semi-anonymous peer-to-peer transfer systems allow offenders to send money directly to children or intermediaries. Payment notes often contain emojis and coded language that innocuously reference the purpose of the transaction. According to police reports, these transfers are commonly used for purchasing access to CSAM, paying minors to livestream abuse, and joining invite-only groups where material is exchanged.

Using gaming currency as a grooming tool

Games like Roblox, Fortnite, Minecraft, and others allow players to purchase or gift in-game currency. Offenders use this currency as a tool to reward compliance, purchase the attention or loyalty of minors and incentivise sexualised behaviour within games or external platforms. In several high-profile cases internationally, minors were groomed into sending explicit content in exchange for Robux, which was then resold or exploited.

Crypto

Europol reports that cryptocurrencies continue to be used as part of exchanges within the growing number of for-profit schemes relating to child sexual abuse material[web:7]. The use of decentralised cryptocurrencies such as Bitcoin has enabled child sex offenders to preserve their anonymity during the process of buying and selling illicit products and services, thereby evading legal repercussions[web:12].

The Internet Watch Foundation (IWF) found a rapid increase in the number of websites that accept cryptocurrency payments for the purchase of child sexual content since 2015[web:8]. In 2018, the IWF identified 81 sites that allowed cryptocurrency payments, while 221 were identified in 2019 and 468 in 2020 (ibid). In 2021, IWF identified 250,000 websites containing illicit content depicting the sexual exploitation of minors. Of these, 1,014 websites enabled criminals to access or purchase videos and images of children being sexually abused or raped using virtual currencies.

Gift cards

While cryptocurrency remains a preferred payment tool for organised CSE networks, a more accessible option is growing rapidly. Offenders are now instructing minors to purchase gift cards, photograph the code, and send it via chat.

Money laundering for CSE profit

Payment platforms without robust verification protocols allow offenders to launder proceeds by creating multiple accounts, using false identities, making small, dispersed payments, and transferring funds across platforms to obscure the financial trail. These techniques are used for drug trafficking and financial fraud, yet CSE sits at the intersection of both criminality and child abuse.

Why Payments Platforms Have Become Such High-Risk Environments

They’re built for speed and convenience,
Payment apps are built on instant transfers, low friction, and minimal verification. As appealing as these features are, they are also conducive to exploitation.

They aren’t designed for children,
Many Platforms do not meaningfully check a user’s age, enabling minors to create digital wallets within minutes.

Financial monitoring tools are not tuned to “grooming signals”,
Payment platforms monitor activity such as terrorism, fraud and money laundering. There are no protocols to monitor payments requests to minors for “photos” for example.

Platforms insist they are not content moderators,
Payment providers argue that they simply move money, not regulate behaviour. But in practice, they are now central facilitators of the exploitation economy.

Enforcement agencies are overwhelmed,
The ACCCE’s report indicates that police are unable to keep up with the volume and sophistication of new digital crime typologies, with CSAM moving faster than investigators can track it.

Where The Law is Failing

Whilst Australia has a robust criminal law framework for online child sexual exploitation, it lacks the framework to regulate the financial infrastructure behind it. As a result, there is no duty of care imposed on payment platforms; requirement to detect grooming-related payments; mandatory reporting of suspicious child-related financial activity; age-verification obligations; financial penalties for failing to prevent or detect CSE-linked payments; or AML/CTF laws explicitly recognising CSE as an economic crime category.

The absence of key regulatory measures creates an environment conducive to exploitation – allowing offenders to operate with impunity and payment providers to evade liability.

Could Payment Platforms Be Liable?

Payment platforms have historically positioned themselves as financial infrastructure, not custodians of user behaviour. But as child exploitation increasingly shifts into the financial layer of the internet, courts, regulators and scholars are beginning to challenge that framing.

The emerging legal picture suggests several overlapping, interlocking theories that could expose payment providers to civil liability, with some jurisdictions already edging in this direction.

Given the regulatory failures, it is pertinent to ask whether there is any scope within the law for payment platforms to be held liable for failing to prevent CSE occurring on or through their systems. In this context, several arguments emerge.

Negligence

Courts are increasingly willing to impose duties of care on digital platforms where harm is foreseeable, vulnerable users are involved, and the platform has exclusive control over a risk vector.

With police agencies worldwide confirming that CSE activity routinely involves digital transfers, a growing number of sextortion cases involving teenagers being paid or extorted via payment platforms and platforms receiving parent complaints, law enforcement notices and internal flag reports, it is undeniable that payment platforms carry foreseeable harm.

In this context, it is clearly established that payment providers knew, or ought to have known, that their systems were facilitating exploitation. In negligence, once knowledge, control and vulnerability align, courts tend to impose duties. Key negligence failures could include: failing to implement age verification; failing to detect high-risk payment patterns (e.g., adult-to-minor micro-payments); failing to act on reports of suspected CSE; failing to suspend or review flagged accounts; and failing to escalate suspicious activity to authorities (AUSTRAC, police, ACCCE). Even without explicit legislation, a negligence duty is increasingly arguable.