Paedophiles using Bitcoin to purchase explicit child images online

Bitcoin has once again been accused of being the 'official' currency for illegal activities, and this time it's neither drugs nor murder for hire.

This time, the cryptocurrency has been blamed on being used by paedophiles to buy explicit child sexual abuse images online.

In the 2014 annual report published by the Internet watchdog The Internet Watch Foundation (IWF), it is said that the "most prolific" commercial websites that sell child sexual abuse images started accepting bitcoins for payments in 2014.

Previously, such content was available only on hidden services on the Tor network, where bitcoin was largely used for payments in return for various illegal services, IBTimes reports.

"One area we look at in particular is the commerciality of child sexual abuse images and videos - people who want to buy and sell this type of content online," said Emma Hardy, the IWF's director of external relations.

"We noticed for the first time ever last year that cryptocurrency or bitcoin was being used."

"We need to ensure we engage with those who run bitcoin services but also other ordinary payment mechanisms, financial providers, to ensure we can help prevent them being abused by criminals," she added.

Every now and then Bitcoin draws the public’s attention because, as a digital currency, it’s often used for the purchase of usually illegal things such as narcotics.

Bitcoin is often described as an anonymous currency because it is possible to send and receive bitcoins without giving any personally identifying information.

Andrew Conway, research analyst at Cloudmark, offered the following comment: “The anonymity of bitcoin transactions means that its major uses involve avoiding regulations and laws. If you can pay for something with a credit card, it's much easier, faster, and safer to do so.

"However, bitcoin is the currency of choice for avoiding exchange controls, unlicensed gambling, Internet drug purchases, and ransomware extortion. We can now add purchasing child pornography to the list. In the past, law enforcement has been able to shut down commercial child pornography by following the money, and arresting both buyers and sellers using the audit trail provided by credit card transactions.

"With bitcoin this is no longer possible. However, the sale of digital goods requires two things, a way of making payments and a method of delivery. According to the ITV report, delivery was made using compromised web servers.

"The temptation is to say "We need to regulate Bitcoin," or even, "We need to outlaw Bitcoin," but in practice this would be impossible. The entire Bitcoin system was designed to be outside the reach of government regulation.

"Bitcoin transactions are slow and clumsy so it will never be widely used for commerce, but it is the darling of radical libertarians and those who believe that the government should not be able to regulate their financial transactions, even if it means that the government cannot regulate child pornographers, either.”