Cryptocurrency payments sent to cryptocurrency wallets associated with child abuse grew 32% last year, in the continuation of a multiyear upward trend.
According to a blog post published by blockchain analysis firm Chainalysis, over $900,000 worth of bitcoin and ether were sent to wallets linked to child abuse, flagged by the Internet Watch Foundation throughout 2019. The figure represents a sliver of the cryptocurrency space’s overall activity, as some estimates point to $2.5 trillion worth of BTC being transacted across the network last year.
Nevertheless, the $930,000 represents a 32% rise in crypto payments going to child sexual abuse material (CSAM) when compared to 2018, whose figures were already 212% higher than the total seen in 2017. Chainalysis based its value on the price of the cryptoassets at the time of the transactions.
The firm added that the rising figures don’t necessarily mean demand for this type of material is increasing, but could rather show that cryptocurrencies are increasingly being used by those buying and selling it. The blog post reads:
We attribute most of these yearly increases to rising adoption of cryptocurrency rather than increased demand for CSAM, and it’s important to keep in mind these transactions represent a miniscule fraction of all cryptocurrency activity. Even so, this should be a concerning trend for the cryptocurrency industry, from both a moral and reputational standpoint.
Most of the payments sent to addresses linked to CSAM, Chainalysis added, fail between $10 and $50. The relatively small amounts could either be related to small one-time purchases, or to regular subscriptions.
Nina Heyder, an economist at the firm, added that most of the funds move through cryptocurrency exchanges, as those sending and receiving payments linked to child abuse use exchanges to cash out or to get crypto. These collect users’ identity via know-your-customer (KYC) checks, and often “cooperate with law enforcement when law enforcement requests more information during investigations.”
It’s worth noting that last month authorities took down a darknet portal that made nearly $2 million worth of cryptocurrency selling child abuse material, and late last year took down the “largest” child porn site after tracing bitcoin transactions.