Unseen Transactions: Crypto's Growing Role in CSAM

Cryptocurrency is playing a pivotal role in the dark web's trade of child sexual exploitation materials (CSAM). Despite a decline in overall revenue and new sellers, a Chainalysis report reveals a disturbing trend: a surge in the sophistication of crypto-based CSAM sales. The report indicates that, in 2023, vendors utilising privacy tools, such as mixers and privacy coins, managed to extend their online presence by 57%, compared to the previous year.

The Lingering Shadow: Extended Lifespan for CSAM Vendors

Chainalysis discovered that cryptocurrency-enabled CSAM sellers exhibited an unprecedented longevity online, with an average lifespan of 884 days in 2023, a stark contrast to the 112 days in 2020. The key factor behind this extended survival is the increasing use of cryptocurrency mixers and privacy coins, rendering the tracing process more intricate for law enforcement.

Chainalysis's chart illustrates the duration of online activity for CSAM vendors each year, indicating a growing resilience to takedowns over time. (Source: Chainalysis)

Cryptocurrency Mixers and Privacy Coins: A Growing Trend

The study identified a growing reliance on "mixers" and "privacy coins" by CSAM vendors. The use of mixers increased from 22% in 2020 to 46% in 2023. Monero, a privacy coin, is gaining popularity in this illicit trade, offering enhanced anonymity for transactions. Chainalysis revealed that 52% of CSAM vendors in 2023 used instant exchangers for Monero, contributing to their prolonged online presence.

The Role of Monero: A Controversial Shield

Monero's reputation for being untraceable adds a layer of complexity to the issue. While there's ongoing debate about its effectiveness in protecting CSAM vendors, leaked information suggests that blockchain analysis services might provide some level of tracing. Chainalysis recommends investments in such services and urges instant exchangers to implement safeguards against misuse by CSAM sellers.

Data reveals a substantial uptick in the utilisation of instant exchangers enabling Monero conversion among CSAM vendors over recent years. (Source: Chainalysis)

Decline Amidst Complexity: A Shifting Landscape

Despite the increased resilience of CSAM sellers in the crypto space, there are signs of a shifting landscape. The overall scale of the problem may be decreasing, with CSAM-related transactions dropping by 22% from 2022 to 2023. The industry's heightened awareness of crypto traceability, exemplified by cases like Welcome to Video, has possibly contributed to a decline in new vendors accepting crypto.

Navigating the Cryptographic Underworld

Chainalysis researchers and the Internet Watch Foundation (IWF) highlight a complex interplay of factors. Eric Jardine, the lead researcher, emphasises the growing sophistication of CSAM sellers, making identification and prosecution challenging. The IWF notes a steady increase in CSAM offers for cryptocurrency over the past half-decade, with Monero now making its presence felt in the illicit transactions.

A Cryptographic Evolution in Crime

The unsettling evolution of crypto-based CSAM transactions reveals a cat-and-mouse game between law enforcement and criminals. As criminals adapt, the need for innovative solutions to trace and curb such activities becomes crucial. The challenge remains: how can authorities stay ahead in this cryptographic underworld?