Crypto usage for child abuse images doubles every year, says watchdog

The number of websites accepting cryptocurrency as payment in exchange for child sexual abuse material (CSAM) has more than doubled every year since 2018, according to a charity that fights online criminal content.

The Internet Watch Foundation (IWF) identified 250,000 websites that contained child sexual abuse last year, more than 1,000 of which allowed users to purchase material using cryptocurrency. This is up from 81 in 2018.

Based on IWF data, the number will rise again this year, albeit not as sharply, despite the collapse of crypto prices.

Cryptocurrencies have become a preferred payment method for illegal activity as they provide anonymity for both criminals and their networks. They are often used to trade drugs, traffic people and pay for illegal content.

Detective Inspector Darren Young, from the Electronic Child Sexual Abuse and Exploitation Unit of London’s Metropolitan Police, said crypto was used to pay for CSAM because the perpetrators believe they can “hide behind the anonymity of these virtual currencies”.

“The majority of payments we see for trading child sexual abuse material, or for watching live-streamed child abuse through other parts of the world, are paid for with crypto,” he said.

The IWF’s figures come as global regulators struggle to crack down on the industry’s illicit underbelly, which often crosses borders.

“Obviously, if you use your credit card details, it’s pretty easy for us. Crypto, because you can use different platforms around the world . . . everything becomes more problematic,” Young added.

The increase in sites accepting crypto payments for CSAM coincided with last year’s market rate, where the growing popularity of digital assets drove prices to record highs. “Fact [crypto] has become so normalized has created this perfect storm. People now trust cryptocurrency, it’s not so niche anymore,” said IWF hotline director Chris Hughes.

The National Center for Missing and Exploited Children, a US government-funded non-profit, received 29.3 million reports of suspected child sexual exploitation last year, a 35 percent increase from 2020.

While the percentage of websites that accept crypto payments remains low, the increase in the number of websites that do has prompted the IWF to launch a “crypto unit” dedicated to combating the new trend.

“Our job is to record as many details as we can as accurately as possible, then we relay that information with our virtual currency alerts to our members and law enforcement partners,” said a member of the IWF’s crypto unit who asked to remain anonymous. .

The IWF is engaging with its more than 175 members to combat images of child sexual abuse shared online, including Amazon, Apple and prominent crypto platform Coinbase. In March 2022, the Brian Armstrong-led exchange conducted a study that identified approximately 6,900 unique user accounts suspected of being linked to activities related to CSAM, human trafficking, or modern slavery. The exchange turned those accounts over to law enforcement agencies.

According to IWF data, more than 50 percent of cryptocurrency payments made in 2022 were in bitcoin. Other popular cryptocurrencies used to transact for criminal content include ethereum and dogecoin.

“I think the fact that the volume is growing, or at least that we’re able to uncover and discover more, clearly shows that it’s working for those people who are making money, because if they weren’t making money, why run the risk?” said Hughes.