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Sextortion is a rapidly growing online harm targeting teenagers and young adults. As victims are pushed into gift cards, crypto transfers and payments to unfamiliar accounts, Silvija Krupena, Director of the Financial Intelligence Unit (FIU) at RedCompass Labs, argues that banks need to recognise the warning signs before harm escalates.
Financial sextortion often starts on social media, where criminals pose as girls or boys of a similar age to the victim, build trust, move conversations to encrypted apps and then use shared images to blackmail victims with threats of exposure. They create panic and shame, then demand money through whatever channel is easiest to weaponise, from gift cards and peer-to-peer payments to crypto, Bitcoin ATMs and transfers to unrelated accounts.
The government in the UK is hardening its response, placing renewed pressure on platforms and device providers to protect children online. Measures include device-level safeguardsย to stop children taking, sending or viewing nude images, and crucially under-16sย will be barred from using certain social media platforms from spring next year.
These measures may help reduce exposure for some younger children, however they represent only one line of defence against a crime that moves quickly across channels. Sextortion can shift from public platforms into private or encrypted messaging, before turning into direct payment pressure, and teenagers may still find ways around age controls. Australiaโs experience reflects this and sends a warning signal that account restrictions do not automatically lead to reduced harm. Its eSafety Commissioner reported that many under-16s continue to keep accounts, create new ones or get through platformsโ age assurance systems.
Although banks are unable to see the fake profile, grooming messages, or WhatsApp threats, they can see some of the financial behaviour that follows, whether it be unusual payments, sudden gift card purchases, first-time crypto activity, transactions to unfamiliar accounts, or repeated small transfers under pressure. When payment behaviour changes all of a sudden, and the wider context points to risk, financial institutions need to be able to ask whether a transaction is part of a broader pattern of coercion or abuse.
The financial trail is already there
The number of reported financial sextortion cases is rising at an alarming rate. In 2025, the National Center for Missing and Exploited Children received an average of 137 reports a day, up 37 per cent on the previous year, while the Internet Watch Foundation’s 2025 data shows boys accounted for 92 per cent of sexually coerced extortion reports over the past three years, with children aged 14 to 17 most commonly featured.
Financial-sector evidence suggests the victim profile is actually broader still.ย Nationwide’s April 2026 review of 50 sextortion cases found victims ranged from 13 to 70, with an average age of 25. Almost half were aged 20 to 29, and 98pc of those identified were male. These figures should widen the lens through which we understand sextortion. Sextortion is a safeguarding, financial crime, cybercrime and organised exploitation issue affecting boys, young men and vulnerable adults who are targeted through urgency, shame and coercion.
Even without seeing the grooming message, banks can recognise warning signs by connecting age, account history, payment destination, channel, timing and behavioural change into a clearer risk picture.
AI raises the stakes
Synthetic images, convincing fake profiles, translation tools and automated scripts generated using AI can help offenders groom victims faster, impersonate peers more convincingly and operate across borders more easily. Meanwhile, shared scripts and coercion techniques allow successful tactics to be repeated on a large scale.
As social engineering becomes more convincing and industrialised, banks have an opportunity to intervene. However sophisticated the deception becomes, criminals still need to move money, and that movement can leave traces in sudden, unusual or high-pressure payment behaviour. Financial institutions should therefore understand sextortion as a convergence crime, it is financially motivated exploitation that cuts across child protection, fraud, cybercrime and organised crime.
By the time a terrified child or young adult is sending money, damage has already begun, and banks may be able to see downstream payment behaviour that other parts of the response chain cannot.ย Financial institutions therefore need typologies grounded in the reality of how sextortion unfolds, with investigators equipped to use clear red flags, regional risk indicators and escalation pathways.
Typologies can help investigators connect payment behaviour to exploitation patterns, rather than treating transactions in isolation. A sudden pattern of low-value transfers, gift card purchases, first-time crypto activity or unusual payment destinations may create a very different picture when seen together. FinCEN’s 2025 noticeย on financially motivated sextortion highlights perpetrators operating from parts of West Africa and Southeast Asia. While geography can help inform the wider risk picture, it must be treated as one contextual factor among several.
The bottom line is financial crime teams need to understand who is being targeted, how urgency is created, which payment methods criminals prefer and how victims behave when they are scared.ย Without that context, banks risk treating signs of coercion as ordinary transactions.
A cross-sector responseย ย
Platforms need to do more to stop fake profiles, grooming and coercive messaging before they reach children, while device providers must consider stronger safeguards that balance privacy, age assurance and implementation concerns.ย Importantly, a ban should not become an exit ramp for major platforms to deprioritise safety because children and vulnerable users will still be present, including those who lie about age, borrow accounts or find workarounds.
Law enforcement needs faster cross-border cooperation because many sextortion operations involve offenders, victims, platforms and payment routes spread across different jurisdictions. Put simply, young people need to know that paying will not make the threat disappear, but asking for help can do just that. Sextortion may begin in private messages, but too often it ends in payments to criminals. Banks must therefore be ready to read those signals and act before the financial trail becomes another missed warning sign.
