Bitcoin, a currency with the promise of anonymity and no government regulation, is a potential hotbed for nefarious activities.
On Wednesday (July 6), London-based bitcoin startup Elliptic announced that it was teaming up with International Watch Foundation (IWF), a non-profit in the UK that monitors online child abuse, to curb the cryptocurrency’s role in the spread of child pornography.
“Over the past few years, we have seen an increasing amount of bitcoin activity connected to purchasing child sexual abuse material online,” IWF CEO Susie Hargreaves said in a press statement. IWF has identified over 68,000 URLs associated with child pornography.
Elliptic’s role is to identify all forms of illicit activity on the bitcoin blockchain, the public ledger that’s shared amongst users to easily keep track of transaction information. Elliptic flags illicit activity for financial institutions and law enforcement agencies. Under the partnership, IWF has provided Elliptic with a database of bitcoin addresses associated with child sexual abuse content for the company to monitor.
The web-based digital currency relies on algorithms to move money around quickly and anonymously with no need for a central authority like Paypal or a bank to process transaction according to Elliptic chief executive James Smith. “This makes bitcoin great for remittances, micro-payments, and small business transactions,” said Smith. “Unfortunately, these same properties of decentralized, international value transfer also make bitcoin appealing to criminals.” Beyond child pornography buyers and sellers, the platform also attracts drug dealers and arms dealers.
“By tagging evidence of criminal activity in our database, such as child exploitation, we are able to alert our customers when criminals are attempting to transact through their systems,” Smith told Quartz.