INHOPE | Cryptocurrency and the Trade of Online CSAM recap
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Cryptocurrency and the Trade of Online CSAM recap

The first webinar in our season of Expert Insights consisted of a unique panel discussion that focused on how the private and public sectors work together to combat commercial child sexual exploitation relying on cryptocurrencies. Our featured speakers were brought together by the International Centre for Missing and Exploited Children (ICMEC). They are a part of the Cryptocurrency Working Group, a task force of leading experts assembled by ICMEC.

Our chair for the day was Ari Redbord, head of Legal and Government Affairs at TRM Labs. Our panellists included Elizabeth (Beth) Bisbee, who is Chainalysis’ Head of US Investigations, leads a team of investigators who work on identifying what happens on the blockchain as it relates to child sexual abuse material (CSAM) and other illicit activity. Jarod Koopman oversees cybercrime efforts throughout the IRS criminal investigations. His team focuses on the financial trail and growing their efforts from a child exploitation and human trafficking component. Finally, Samantha Rodriguez, Senior Global Intelligence Investigator at Coinbase, works closely with Chainalysis and handles all law enforcement relationships and inquiries that come from law enforcement.

"How do blockchain analytics tools engage with law enforcement?"

The blockchain is an open ledger and so tracing the flow of cryptocurrency in investigations is vital. Companies like Chainalysis and TRM provide the commercial tools to law enforcement, crypto businesses and financial institutions that help in following the funds on the blockchain or doing the “on-chain investigating”.

"How does law enforcement approach cryptocurrency investigations?"

The IRS-CI collaborates with law enforcement in this space, whether it’s exchanges, virtual asset providers or the technology behind some of these tracing components. Additionally, they are usually provided with a lead that can come internally or from foreign or domestic agencies.

Proactive investigations

Samantha and her team at Coinbase run their own proactive investigations and provide any necessary leads to law enforcement. They go the extra mile in supporting the needs of these investigations, whether that means giving a core understanding of the kinds of crimes that occur in relation to cryptocurrency or how they function up to high-level details.

The need for international cooperation among law enforcement

Jarod Koopman presented a riveting case study on the largest takedown of a child exploitation site on the darknet. Trade of this illegal material impacted 40 countries and has resulted in 400+ arrests so far. “The more people that we can get involved in this space, the better off we are in terms of stopping this effort.”

This investigation was generated by a lead from Chainalysis. Beth Bisbee’s team was able to showcase their data and findings on the tooling and provide law enforcement with greater context on what was happening in the blockchain. Ari emphasized that while this case is compelling it is not case-specific as there are a plethora of them. It’s important to highlight that this case combined off-chain police work with on-chain investigating, and the extraordinary efforts and cooperation of law enforcement security around the world helped to tackle the issue.

The importance of public and private partnerships

This space has completely shifted the way law enforcement functions and collaborates with the crypto financial market sector and tooling and technology partners. It is constantly evolving, and law enforcement cannot stay fully in tune with it. The exponential growth of crypto being used in the mainstream is naturally going to increase the criminal activity associated. IRS-CI is now working on approximately 150 active cyber cases and 200+ are currently working through criminal proceedings. Seizures associated with these cases have gone from values of $700,000 in 2019 to $137 million in 2020, to $3.5 billion in 2021, and just this year his team conducted the arrest and seizure involving Bitfinex at $3.6B in value.

This speaks to the volume and magnitude of this type of space; therefore, public and private partnerships are vital pieces in these investigations and must continue. Individuals from Europol as well as those in the private sector from NGOs, businesses, and financial institutions play a significant role.

These interactive discussions encourage an open dialogue. We’d like to keep the conversation going and ask, in terms of developing larger collaboration across industries in combating CSAM, what is currently working and progressing? What areas can be developed further?

Cryptocurrency and the Trade of Online CSAM recap

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