Chainalysis in Action

Chainalysis in Action: DOJ Announces Shutdown of Largest Child Pornography Website

Today, the Department of Justice announced the shutdown of the largest ever child pornography site by amount of material stored, along with the arrest of its owner and operator. More than 337 site users across 38 countries have also been arrested so far. Most importantly, as of today, at least 23 minors were identified and rescued from their abusers as a result of this investigation.

U.S. Attorney Jessie K. Liu put it best: “Children around the world are safer because of the actions taken by U.S. and foreign law enforcement to prosecute this case and recover funds for victims.”

Commenting on the investigation itself, IRS-Criminal Investigations Chief Don Fort mentioned the importance of the sophisticated tracing of bitcoin transactions in order to identify the administrator of the website.

We’re proud to say that Chainalysis products provided assistance in this area, helping investigators analyze the website’s cryptocurrency transactions that ultimately led to the arrests.

Want to learn more about the role of our software in the operation?

Download the Case Study —> How Blockchain Analysis Helped Take Down the Largest Child Sexual Abuse Material Site

Welcome To Video: How the website worked

Welcome to Video (WTV) was a child pornography website that operated out of South Korea and allowed users to buy content with Bitcoin or to upload their own. Upon signing up for the site, users received a unique Bitcoin address where they could send funds to buy content to view.

When law enforcement shut down the site, they seized over 8 terabytes of child pornography, making it one of the largest seizures of its kind. The site had 1.3 million Bitcoin addresses registered. Between 2015 and 2018, the site received nearly $353,000 worth of Bitcoin across thousands of individual transactions.

Taking down Welcome to Video

Cybercrime transcends national borders. Welcome to Video had a global customer and contributor base requiring cross-border collaboration among law enforcement agencies across the world. IRS-Criminal Investigations (IRS-CI), Homeland Security Investigations (HSI), and other agencies used Chainalysis software to analyze blockchain transactions and map out contributors and users of the site. This enabled them to disseminate the blockchain evidence to their partners in the United Kingdom, South Korea, Germany, Saudi Arabia, the United Arab Emirates, the Czech Republic, Canada, Ireland, Spain, Brazil and Australia, and ultimately make arrests.

With the site’s listed Bitcoin address, IRS-CI and HSI used Chainalysis Reactor, our investigations product, to analyze transaction activity and build a graph showing the flow of funds in and out of the WTV address.

Here we see that WTV received funds from several different exchanges. This information allowed IRS-CI to contact exchanges for more information on the addresses sending money to WTV.  Because exchanges typically perform Know Your Customer (KYC) processes, many were able to provide copies of identification, addresses, and other relevant transactions associated with those accounts.  While in many cases the information supplied by the exchanges was enough to identify WTV users, in other cases IRS-CI was able to combine the account information with open source intelligence and standard investigative techniques to identify users.

Chainalysis tools then augmented the work done by IRS-CI and Homeland Security Investigations (HSI) to break down regionally-specific information. This both helped law enforcement teams around the world make arrests related to WTV, and understand how blockchain evidence can be used to take down sites like WTV more generally.

By March 2018, agents arrested the WTV owner and shut down the site.

Proud to be of service

We’re proud of the work done by law enforcement and that our products could support the takedown of WTV. Most importantly, we were able to help law enforcement free several children from their abusers and begin the long road of bringing hundreds of dangerous individuals to justice. Beyond that, we were also able to advance our mission of building trust in blockchains. We want to enable an entire economy powered by cryptocurrency, but sites like WTV destroy the public’s faith in the technology and slow down adoption in the legitimate economy. Fighting against them is a step in the right direction.