Feds take down one of the largest child exploitation sites; seeks to seize bitcoins

U.S. and Korean authorities have taken down one of the world's largest online marketplace for child pornography, according to an unsealed indictment first cited by NBC News.

According to the indictment, between June 2015 and March 2018, Welcome to Video, received at least 420 bitcoins (approximately $370,000 at that time) through 7,300 bitcoin transactions from users in the United States, United Kingdom, and South Korea. These bitcoins were used to pay for child pornography videos on the site, which were downloaded over one million times. 

Welcome to Video was allegedly ran by Jong Woo Son, a 23-year-old South Korean national. Son is currently serving his sentence in South Korea. In addition to Son, 337 site users from countries like U.S., U.K. South Korea, and Canada have been arrested and charged by local government enforcement agencies.

According to the U.S. Department of Justice (DOJ), law enforcement agencies were able to track Welcome to Video's users by analyzing Bitcoin's blockchain.

“Through the sophisticated tracing of bitcoin transactions, IRS-CI special agents were able to determine the location of the Darknet server, identify the administrator of the website and ultimately track down the website server’s physical location in South Korea,” said IRS-CI Chief Don Fort.  “This large-scale criminal enterprise that endangered the safety of children around the world is no more.  Regardless of the illicit scheme, and whether the proceeds are virtual or tangible, we will continue to work with our federal and international partners to track down these disgusting organizations and bring them to justice.”

Prosecutors have also filed a civil forfeiture claim to recover funds from 24 bitcoin accounts associated with three cryptocurrency exchanges. According to the DOJ, these funds, through a restoration process, will be returned to victims of the crime.

Recent analysis from The Block found that bitcoin is still by far the most supported cryptocurrencies by darknet marketplaces, followed by monero and litecoin.