China-based CSAM networks see alarming growth using crypto
Full story: https://grafa.com/news/cryptocurrencies-china-based-csam-networks-see-alarming-growth-using-crypto-268003
Chainalysis has reported a troubling rise in China-based networks distributing child sexual abuse material (CSAM), with these vendors now accounting for nearly 39% of global inflows in the first quarter of 2024.
The report highlights the sophisticated use of cryptocurrency by these networks to facilitate illegal activities, marking a significant increase in crypto-related crime.
The report notes a sharp increase in on-chain activity from China-based CSAM vendors since late 2023.
These networks have expanded their operations by using cryptocurrency to process payments for access to CSAM material.
Prices for accessing such material range from as little as $5 for a single day to around $41 for nearly permanent access, showing how crypto is being utilised to streamline and anonymize these transactions.
The emergence of new on-chain infrastructure has enabled these networks to better evade detection.
Many China-based wallets linked to CSAM activity are relatively new, established as recently as mid-2023.
This suggests that these networks are not just exploiting existing systems but are also developing new methods to avoid law enforcement scrutiny.
The report also highlights the use of instant exchangers by CSAM vendors for cashing out their crypto holdings.
These platforms, which are non-custodial but more user-friendly than decentralised alternatives, allow for immediate conversion of funds, complicating efforts to track and block these transactions.
Chainalysis also identified a significant connection between these activities and Huione Guarantee, a Chinese-language marketplace linked to the Cambodian conglomerate Huione Group.
This platform has processed over $49 billion in crypto transactions since 2021 and has been implicated in facilitating various cybercrimes, including CSAM distribution and other frauds.
The report underscores the growing sophistication of cybercriminal networks in China and their increasing reliance on cryptocurrency to fund and carry out illegal activities.
This raises concerns about the effectiveness of current measures to combat these crimes, highlighting the need for stronger international collaboration and more advanced tracking technologies.
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