UK

Teaming Up To Combat Bitcoin’s Role In Child Porn

The cryptocurrency is used to make discreet transactions on the internet

UK
REUTERS
Jul 06, 2016 at 4:30 PM ET

Bitcoin startup Eliptic and online child abuse watchdog the Internet Watch Foundation have teamed up to combat the use of bitcoin in the world of online child pornography, the two organizations said Wednesday. IWF handed over a database of bitcoin addresses it has traced to child porn activities to Eliptic, which identifies illicit activity on the bitcoin blockchain, or the currency’s public ledger.

“This is the first time anybody has started identifying these crimes in bitcoin and flagging them up in a system like ours,” Elliptic CEO James Smith told Reuters. “This is a great step…towards our goal of getting rid of any sort of illicit activity in bitcoin.”

Bitcoin is a type of encrypted digital currency that operates independently of any central banks. But while Bitcoin has become an attractive alternate option for people trying to make anonymous transactions while skirting the oversight of authorities, the cryptocurrency is also favored by criminals operating online, including child pornographers.

However, Eliptic can trace Bitcoin transactions “across hundreds of entities,” since bitcoin operates on an open platform. The company, which monitors potentially eyebrow-raising activities and can see where bitcoins are moving to and from, will use IWF’s data and help identify potential criminals to clients. The company raised $5 million earlier this year.

“Over the past few years, we have seen an increasing amount of bitcoin activity connected to purchasing child sexual abuse material online,” IWF Chief Executive Susie Hargreaves told Reuters. “Our new partnership with Elliptic is imperative to helping us tackle this.”

Fred Langford, deputy CEO of IWF, told CNBC that offenders are no longer operating in the far reaches of the internet. “Most of the sites we are seeing taking bitcoin payments are not on the dark web, people on the open web abusing cloud services to host their commercial entities, and they take bitcoin.”

However, Eliptic noted to Reuters that while illegal activity on the bitcoin network may be increasing, the overall proportion of illicit transactions with the currency was going down due to bitcoin being more accepted by mainstream consumers.