Nearly $1 million in bitcoin and ethereum flowed into child pornography-linked wallet addresses in 2019, continuing a multiyear upward trend that captures the complicated realities of mass crypto adoption.
The statistic, disclosed in a Tuesday blog post by forensics firm Chainalysis, is a tiny sliver of overall crypto usage – even on March 31, 2019, one of the slower trading days of that year, Messari’s estimated $128 million worth of bitcoin in transit dwarfed the nearly $930,000 that Chainalysis traced to addresses flagged by the Internet Watch Foundation across 365 days.
But the troubling total nonetheless documents crypto’s growing popularity as a method of payment for child sexual abuse material (CSAM). Last year, 32 percent more crypto value moved into CSAM than in 2018, which itself was 212 percent higher than 2017’s total. Chainalysis based its totals on the cryptos’ value at time of transaction.
The 2019 figure comes in spite of law enforcement agencies’ global rush to dismantle online CSAM operations, including some of the largest ever uncovered. March 2018’s cross-border takedown of the Welcome to Video CSAM ring shuttered a darknet site that had collected some 420 total bitcoin across its nearly three-year reign.
Traceability
While Welcome to Video’s downfall did not stop 2018 or 2019 from hitting record usage highs, it does illustrate one of the upsides – from a law enforcement standpoint – of people using crypto to pay for CSAM. Bitcoin and ether are inherently traceable, and when users pay for CSAM without attempting to thoroughly obfuscate their tracks, they’re surprisingly easy to find and jail.
Most of the funds come right from exchanges, said Nina Heyden, an economist at Chainalysis. Better yet: from compliant exchanges who collect their users’ identity data as required by law.
“The good thing about that is those exchanges often cooperate with law enforcement when law enforcement requests more information during investigations,” Heyden said.
For example, law enforcement used crypto tracing software to arrest hundreds of Welcome to Video customers whose transaction trails often led to identifiable exchange accounts. Tracing also helped investigators uncover other CSAM rings associated with Welcome to Video via its users’ wallet addresses, as with DarkScandals.