Proponents of cryptos tout anonymity, the fact that digital coin transactions are hard to trace, and that blockchain allows for transactions to occur pretty much instantaneously between parties.
Thus, for criminals, at times Bitcoin and other cryptos are a conduit to money laundering, ransomware and, at times, just trying to hide in plain sight.
Sometimes the darkest deeds, even done through cryptocurrency means, come to light.
In news at the end of this week, the largest child pornography site in the world has been shuttered — and had operated across the Dark Web, funded by Bitcoin.
As reported in chainalysis.com, a number of law enforcement agencies announced arrests and forfeitures tied to the crackdown on the site.
The agencies, reported the site, spanned the U.S. Attorney’s Office for the District of Columbia, the Justice Department’s Criminal Division, the IRS Criminal Investigation (IRS-CI) and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI). Those U.S. agencies worked with a number of foreign law enforcement agencies including the National Crime Agency of the United Kingdom and Republic of Korea.
Agents of the IRS Criminal Investigation department found the site, known as Welcome to Video, as they investigated the dark web. And, according to the investigation, the IRS was able to trace and de-anonymize Bitcoin transactions across the globe, which in turn led them to the predators.
The site’s content was available for purchase with Bitcoin.
In terms of scope, the site reportedly had 10,000 CDs’ worth of images and videos.
The authorities arrested Jong Woo Son, a South Korean national, and Son, in custody in South Korea, has also been charged in the United States. More than 330 users have been arrested across 23 states and internationally.
And in terms of mechanics, according to reports, the users received Bitcoin address, created accounts on the Welcome to Video website and paid using the crypto to watch videos. There were at least 1 million Bitcoin addresses tied to the site. The funding to run the site, according to law enforcement, came from 24 individuals across five countries,
In a statement, IRS-CI Chief Don Fort said that “through the sophisticated tracing of Bitcoin transactions, IRS-CI special agents were able to determine the location of the Darknet server, identify the administrator of the website and ultimately track down the website server’s physical location in South Korea.”
Addressing criminals using crypto in their arsenal, he said: “You used to hide by laundering your money through shell companies around the country, but we traced you. You took your money offshore and hid around the world, but we found you. You went on the dark web thinking that your actions were anonymous, but they weren’t, and we again found you. You now deal in crypto-currency, again thinking this will make you anonymous, but our agents have once again proved that there is nowhere you can hide.”
Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The PYMNTS Next-Gen AP Automation Tracker, is a monthly report that highlights the most recent accounts payable developments and automated solutions that are disrupting how businesses process invoices, track spending and earn rebates on transactions.