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Chainalysis: $930,000 worth of Bitcoin payments to addresses associated with CSAM providers in 2019 32% increase over 2018

Chainalysis published its latest analysis of the use of cryptocurrencies to purchase child sexual abuse material (CSAM) on the darknet. In the report, Chainlaysis noted that it traced a Bitcoin payment of less than $ 930,000 to the addresses associated with CSAM suppliers in 2019. This represents a 32% increase from 2018, which in turn presented a 212% increase from the previous year.

Chainalysis: Stark year-on-year rise is not reflective of an absolute rise in CSAM demand

Chainalysis emphasized that:

“This stark year-on-year rise is not necessarily reflective of an absolute rise in CSAM demand, but is likely to reflect a rise in the level of adoption of cryptocurrencies across all sectors.”

chainalysis-930000-worth-of-bitcoin-payments-to-addresses-associated-with-csam-providers-in-2019-32-increase-over-2018

Bitcoin payments to CSAM providers, 2015-2020 | Source: Chainalysis

Besides, Chainalysis said:

“$ 930,000 in Bitcoin represents a minuscule fraction of all cryptocurrency activity — and yet the industry should be concerned about such usage of cryptocurrencies in a criminal and deeply exploitative industry.”

While cryptocurrencies may have become popular among illegal content providers due to their fake properties, Chainalysis noted that blockchain could provide data investigators with actionable data that sheds light on the profiles and activities of those involved.

Among the critical patterns identified in the report are regular low-value payments – usually between $ 10 and $ 50 in Bitcoin – that are sent between 11 pm and 5 am. Although small payments make up a large proportion of transactions, CSAM providers draw a significant percentage of their revenue from much larger individual payments.

Other signs of illegal CSAM activity include cryptocurrency transactions linked to credit and prepaid debit cards or transactions made multiple times to one address (or group of addresses controlled by the same entity).

Crypto payments for known escort services or other adult service providers or buy crypto tokens targeting the mature industry that target the adult industry specifically can provide law enforcement with further data points towards an analysis of the CSAM darknet sector.

The Backpage listing website – described as the world’s largest brothel – was seized by the U.S. Department of Justice in 2018.

CEO Carl Ferrer later pleaded guilty to conspiracy and three counts of money-laundering, in part via cryptocurrencies, admitting he had been aware that the “great majority” of the site’s ads were for prostitution services. Ferrer has laundered $ 500 million in revenue through numerous bank accounts and websites, including Coinbase, GoCoin, Paxful, and Kraken, among others.

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