New partnership cracks down on child abuse enabling currency

The Internet Watch Foundation (IWF) has entered into a partnership with a pioneering start-up company to identify when digital currencies are being used for criminal activities.

Blockchain – the technology underneath online currencies such as Bitcoin – intelligence firm Elliptic uses machine learning technology and analytics to obtain evidence of where Bitcoin has been used to fund crimes.

The company, which was started in 2013 by ex-financial services sector workers Dr James Smith, Tom Robinson and Adam Joyce, will be working with the Internet Watch Foundation (IWF) to clamp down on offenders that use Bitcoin to procure images of child sex abuse.

The IWF has provided its database of Bitcoin addresses associated with CSE content to Elliptic.

Elliptic will then integrate this unique data set into its transaction monitoring and investigation products and will automatically alert financial institutions and law enforcement clients when a suspicious transaction occurs.

In 2015, the IWF identified more than 68,000 URLs containing child sexual abuse images, which are increasingly purchased using online currencies such as bitcoin.

Ellitpic’s specially created software analyses processes within the blockchain. It then tracks payments made by Bitcoin account holders and assesses them for any suspicious activity, helping piece together the details of cases involving digital currency.

Chief executive of the IWF Susie Hargreaves, said: “Over the past few years, we have seen an increasing amount of Bitcoin activity connected to purchasing child sexual abuse material online. Our new partnership with Elliptic is imperative to helping us tackle this criminal use of digital currencies.”

Mark Birch, former detective chief superintendent and National Regional Organised Crime Unit lead for Intelligence, said Elliptic and IWF’s partnership represents a major step forward in Bitcoin’s evolution.

“Elliptic has demonstrated to banks, law enforcement and the public at large that they are taking meaningful steps to eliminate the illicit use of Bitcoin. They have set an important precedent for Bitcoin companies worldwide to fight crime,” he said.

In addition, Elliptic is also working closely with IWF’s to implement joint best practices for identifying and preserving evidence of illicit Bitcoin activity.

Dr Smith added: “We have a profound respect for the critical and difficult work that IWF undertakes. We are proud to take a leadership role in combating Bitcoin’s use to facilitate these terrible crimes.

“In a world’s first, Elliptic’s clients can now automatically monitor all transactions for any connection to proceeds of child sex abuse.”

As well as child abuse, the software – known as Elliptic AML – has been used by federal law enforcement agencies in America and Europe, as well as police forces in the UK, to tackle a whole range of crimes that involve digital currency; including arms trafficking, drug smuggling and extortion.

AML can build a view of how entities are interacting with each other and allows law enforcement to trace payments to piece together a picture of suspected illegal activity.

While it can’t determine the true identities of account holders, the software is able to spot patterns within transactions and from that gather meta data to understand who the entities are and begin to map the locations of drug markets or money laundering services, potentially tying together previously separate elements of a case.

Since Bitcoins emergence over the last decade, criminals have used the anonymity it provides to purchase illicit goods such as firearms and drugs, as well as to launder the proceeds of their crimes.

However, Dr smith explains that, while it is true you do not have to use your personal details to sign up, all transactions are recorded publically and logged.

Speaking to Police Professional, he said for companies to start using Bitcoin technology it needs to be much safer.

“There are lots of things that need to be done, but the one we thought we could help w