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US Law Enforcement Traces Bitcoin Transfers to Nab ‘Largest’ Child Porn Site

230 points by srameshc 7y ago

SI_Rob 7y ago
so the anonymity is pseudo, whereas the pedophilia is real?
- fooker 7y ago
  Nobody has seriously claimed that Bitcoin is anonymous.
  - jjulius 7y ago
    Be careful speaking in such absolutes as "nobody". Back when Silk Road was all the buzz, people who may've lacked the same technical knowledge you and I have would claim that using Bitcoin on Silk Road was an anonymous way to pay for what you bought.
  - dragontamer 7y ago
    Not BTC being anonymous, but that BTC "mixer" services would anonymize the data in an untrackable way. I never trusted the mixers personally. But it was a hot debate item a few years back whether or not law enforcement could track transactions through a mixer. Its always been my firm belief that a mixer was just automated money laundering and probably puts you up for legal scrutiny as well. But we'll see how the FBI decides to handle those...
    - tempsy 7y ago
      It's relatively easy to identify mixers, so by sending money to a mixer you immediately flag your sending account as high risk...
      - jandrese 7y ago
        More importantly receiving money from a mixer could taint your wallet for converting the bitcoins into real money. KYC laws kick in. It's easy to check if you've ever had coins from a mixer enter your wallet. The idea that your transactions are mixed up and impossible to track doesn't matter so much if they just assume everybody who uses a mixer is a criminal.
        __s 7y ago
        You can't reject someone depositing to your address. So a tumbler can taint whichever addresses it pleases You aren't tracking coins with the ledger, only totals. So address A can have 10 btc, tumbler adds 5 to A, then A transfers 5 to B, 5 to C. If C is an exchange, does it consider that A is still holding 5 tumbled coins? Or does it say B has the tumbled coins? Or does it reject A's offer of 5? Feel free to shift values such as A having 100 BTC, receiving 0.01 tumbled BTC, & wanting to send 1 BTC to exchange Also hard to track something like A sending tumbled coins to B, which triggers the owner of B to have C send non tumbled coins to D. You can even have this service offered at an exchange rate, so D receives less than B did
        jandrese 7y ago
        Easiest solution is to just taint any wallet that has ever had a coin from a known tumbler added to it. It's harsh and a malicious tumbler could mess up famous wallets, but easy to implement and "safe" to a point. A harder solution only allows them to withdraw up to the number of coins you can verify were not tumbled. So if some malicious tumbler deposits 0.000001 coin in your wallet you can convert all but 0.000001 of your wallet's value at an exchange.
      - steveeq1 7y ago
        You get around that by converting from btc to monero and then back again. Either through bisq or through xmr.to. "mixers" are obsolete now because it's a central point of failure.
        7y ago
    - hn_throwaway_99 7y ago
      Are any of the mixers still up? I remember about a year ago when one of the most popular ones abruptly shut down when it became clear the government would go after him for abetting money laundering if he continued.
      - lacker 7y ago
        Yeah. There was a leak recently from a Chainalysis employee who claimed that they were unable to trace transactions through the Wasabi wallet, which is a wallet that integrates a coinjoin mixer. I think there are other coinjoin-based mixer services operating.
        RandomBacon 7y ago
        A supposed employee in an unverified AMA.
        steveeq1 7y ago
        yeah, but he knew his stuff so it at least sounds plausible
  - simias 7y ago
    I'm pretty sure by now somebody has seriously claimed that Bitcoin cures cancer, speaks Romanian and cure male pattern baldness. Anonymity and protection from the Big Bad Government were definitely talking points used by many cryptocurrency enthusiasts. "It can't be banned and can't be seized", rings a bell? Except of course if the Big Bad Government comes knocking at your door and tells you to hand your wallet over "or else".
    - steveeq1 7y ago
      And how are they going to know you even HAVE a wallet? There are anonymization techniques like wasabi and monero that are fairly trivial to use. It's basically like trying to outlaw software piracy, it's a hard sell.
    - fooker 7y ago
      > Can't be banned This part is sort of true. A government can ban fiat <-> BTC conversion but there isn't really a way to stop people from providing services in exchange for BTC.
  - quickthrower2 7y ago
    I think anonymous/not anonymous binary distinction is too black/white. Bitcoin is more anonymous than a bank transaction. If I buy something with a credit card, they have my credit card number that is easily linked to me. With Bitcoin it is less easy. Unfortunately with Bitcoin once you have been 'revealed' then your transaction 'graph' is then revealed in the public, whereas the credit card doesn't have that problem. It depends who you want to be anonymous from. Governments can easily get bank transactions, and also they can investigate bitcoin-based crime and then just trace the public ledger. Businesses will not easily get bank transactions or map general bitcoin addresses to people, but if you use a credit card you tend to have to give them a lot of other matching information such as your name and address, whereas with bitcoin you don't need to give them anything. Assuming there is no delivery involved it can be pretty anonymous. But again if they did happen to pattern match (maybe they have another customer who you have dealt with too) they could join some dots. But to be safe it's best to assume Bitcoin is not anonymous and that anyone can find out eventually where you have spent your money.
- NikolaeVarius 7y ago
  From the very beginning, bitcoin never promised fully untraceable and anonymous transactions.
  - wcoenen 7y ago
    Section 10 of the original white paper is about privacy. It imagined bitcoin transactions being public, but still about as private as stock trading transactions that are published on a ticker tape. http://bitcoin.org/bitcoin.pdf http://bitcoin.org/bitcoin.pdf Bitcoin transactions turned out to be a great deal less private than that, because separate transactions from the same wallet can be linked via the change outputs (unlike separate trades on a ticker tape).
- rolltiide 7y ago
  SHUM should have used monero There is a reason that many darknet markets have it as an option and some use it exclusively
  - ratsmack 7y ago
    What makes Monero different than Bitcoin?
    - simias 7y ago
      It effectively embeds a coin mixer in every transaction, so to speak. In bitcoin you can trace transactions from one account to the next in the public ledger, with Monero theoretically you won't be able to follow the funds quite as easily. Of course it remains to be seen if it really works if some three-letter organization really wants to figure out who you are.
      - rolltiide 7y ago
        Does it remain to be seen? There have been busts and indictments where the state was not able to determine anything about the Monero wallet that were also seized in the operation
        chrshawkes 7y ago
        Can't the data just be taken directly from the ISP connecting to whatever crypto services are out there? If the FBI really wanted to get that info, I would think they can track all activity from the main hub directly.
        steveeq1 7y ago
        It's encrypted, so no.
        rolltiide 7y ago
        Monero nodes see IP addresses, but they do not see the sender's crypto address, and they do not see the receiver's crypto address. So in its current state, ISPs would only know what someone has launched a Monero wallet at some point in time. Using Monero is completely benign. In its also current but also upcoming state, Monero clients automatically connect to TOR or I2P. So a Monero node would not know your IP address and an ISP therefore would not either. Monero exchanges are merely Monero clients, and a Monero client knows its own address, and it knows the address the sender told it to send to which would be the receiver. But neither of these addresses are ever seen on the blockchain, and the receiver's Monero client does not know which address sent to it. Since the receiver's client doesn't reveal which address sent to it, and there is no passive blockchain sleuthing possible, and the nodes don't see any of this either, there is very little the FBI could do if users are following best practices which are the default behaviors of this network. Non-default behavior would be users that rely on exchanges exclusively: they send their 2 Monero from one exchange to another exchange. Exchange 1 is an account that belongs to the user, and it knows the address of Exchange 2. Exchange 2 is an account that belongs to the user, and it only has the same balance and transaction id as Exchange 1's send. The FBI happened to have subpoena'd both exchanges and found the same transaction id. Improbable now, but it could happen anytime in the future. When the user adds their own Monero client into the mix (exchange 1 - client - exchange 2, + time + different amounts), this gets exponentially more difficult as you already need access to the user, the subpoena, and their Monero client. There are many barriers to getting that, especially in the face of benign economic activity, and the blockchain itself doesn't help. You also aren't supposed to re-use addresses. This is true for Bitcoin and all cryptocurrencies. It means that an exchange wouldn't even know if you were sending to yourself, one of your other wallets, to a vendor to pay someone, or what. With Monero none of those recipients know who sent to them.
5822130027 7y ago
Doesn't it mean bitcoin HELPs to catch criminals instead of helping them ? If bitcoin was more widely used - wouldn't it be a dream come true for every wannabe Stasi/Gestapo organization ?
- gricardo99 7y ago
  I've made this exact point before as well. High on the wish list of any authoritarian/repressive regime would be a monetary system where all economic activity and transaction is visible to them.
  - rolph 7y ago
    this is is why cashless, is a big issue. there was a submission here a bit ago regarding canadian banking systems wanting to go no cash, and mandate electronic purchase and payment. we have seen economic collapse and what it looks like. if physical banknotes are not available, we use cigarettes, vodka, and tampons. I think those things are fairly untraceable
    - djmips 7y ago
      I recall that it was reported that Tide laundry detergent was being used as a currency for drug deals. http://nymag.com/news/features/tide-detergent-drugs-2013-1/ http://nymag.com/news/features/tide-detergent-drugs-2013-1/
- KingMachiavelli 7y ago
  Perhaps on a technical level it's easier to access the Bitcoin ledger than bank records but LE has far more experience with the later. Also, if you solely receive and send bitcoin outside of an exchange, you can easily remain pseudo-anonymous in that anyone can see that wallet X has received Y bitcoins and send W bitcoins but without a person attached to the wallet, it's useless information. This is way crypto currencies are regulated at the edges, if fiet to crypto is watched just like any other bank/exchange, then criminal activity has a hard time getting money out. At the end of the day, it's difficult to buy 'real' things; food, clothing, housing with bitcoin.
catalogia 7y ago
> " Law enforcement was able to trace payments of bitcoin to the Darknet site by following the flow of funds on the blockchain. Separately, Chainalysis said it was their Chainalysis Reactor software used to analyze the blockchain transactions." By design, bitcoin uses a public ledger. This sort of investigation being possible shouldn't catch anybody by surprise.
- sixstringtheory 7y ago
  Wouldn't it be amazing if years from now, we found out that Satoshi Nakamoto was an intelligence agent, and that there was a massive state-backed social media campaign to convince the dark web to use Bitcoin, for this very reason?
  - mdni007 7y ago
    It's an already known fact that Satoshi Nakamoto's real name is Steven Nathaniel and is my uncle who works for Nintendo.
    - sixstringtheory 7y ago
      If that's true, you could consider updating the Wikipedia page [0] for him! In any case, that's what I get for only checking Wikipedia, but I didn't follow that particular drama closely in the first place. [0]: https://en.wikipedia.org/wiki/Satoshi_Nakamoto https://en.wikipedia.org/wiki/Satoshi_Nakamoto
jtbayly 7y ago
> In cases where that was insufficient, account information combined with open source intelligence and standard investigative techniques were enough to identify users. What is open source intelligence?
- maximente 7y ago
  the wiki article is solid: https://en.wikipedia.org/wiki/Open-source_intelligence https://en.wikipedia.org/wiki/Open-source_intelligence
- skeptical900067 7y ago
  Iirc OSINT is information that is intentionally publically available, like county arrest records.
- 33degrees 7y ago
  Intelligence based on public sources as opposed to clandestine ones. Nothing to do with open source software.
- deleted 7y ago
  [deleted]
ratsmack 7y ago
I don't think Bitcoin can be anonymous if it goes through an exchange, because you have to create an account with identifying information. I you host the endpoint yourself, it may be possible to completely mask the source, but I'm really not sure.
- dmos62 7y ago
  Yes, Bitcoin is anonymous only under certain circumstances. You can get Bitcoin anonymously, and you can make transactions anonymously, but it takes know-how
- rtkwe 7y ago
  In theory a tumbler could disconnect the identify information even on coins bought initially on an exchange with KYC compliance. Not sure if anyone's figured out how to track transactions through those yet with just public info from the blockchain. (I imagine they'd keep it pretty quiet if they had)
  - mmcwilliams 7y ago
    This assumes that the operators of the tumblers are to be trusted and aren’t state actors themselves. It would be a pretty smart move for the Feds to run one or more of those operations.
    - bredren 7y ago
      Coinjoin is an ongoing attempt to remove centralization from tumblers: https://en.bitcoin.it/wiki/CoinJoin https://en.bitcoin.it/wiki/CoinJoin
      - vkou 7y ago
        It will take a stroke of a pen for the US Government to require that exchanges do not accept any coins that have gone through a known tumbler after <certain date> Imagine a money laundering operation, where every laundered physical dollar gets a physical stamp of 'THIS CAME THROUGH A MONEY LAUNDERING OPERATION'. That's the current state of BitCoin tumblers.
cheez 7y ago
There is a dead comment on this thread which is suggesting that Bitcoin is more useful than any other form of money for law enforcement because it is only pseudo-anonymous. I'm not sure why it is dead (perhaps the reference to Stasi/etc) but I think this is a valid point and is why I didn't buy more than a few hundred in Bitcoin many years ago to get a feel for the currency. I gave it all away because I did not believe it is a valid form of money.
- codezero 7y ago
  The poster has negative karma over-all so I think that might have affected it. I vouched for the comment and it looks un-dead now :)
  - cheez 7y ago
    You are a saint
nullbyte 7y ago
This is why you should exchange your Bitcoin to Monero. Transfer the value to another anonymized blockchain and make future transactions nearly impossible to track.
- moocowtruck 7y ago
  we actually track a large list of digital currency, more and more each week and there is a ton of funding more than we'd ever expect being given for getting anything we need done, i dont see it really as an issue.. digital currency has been great for us
  - tmoravec 7y ago
    I'm very skeptical that you're tracing Monero. Unless you've broken ed25519, that is. In which case, you have better things to do than crack minor cryptocurrency transactions...
    - hackinthebochs 7y ago
      There are a lot of weak links in Monero that have nothing to do with breaking ed25519.
      - Forbo 7y ago
        Namely?
        hackinthebochs 7y ago
        Ring signature size is still a problem. Yes, it masks the originating address of a transaction. But you know its 1 of N (currently 11 I think?). We know that most people buy coins from exchanges and then send them to their destination. An authority can simply subpoena every top exchange for users for whom any one of the addresses in the ring signature belong to. That's 11 addresses. If we assume the user may have made an intermediate transaction, we can go up two levels. That's 11^2 addresses. Three levels, 11^3. Given normal people's typical usage, monero's anonymity falls to broad subpoena power.
xenospn 7y ago
It honestly breaks my heart to know that there is such massive demand for these videos, where thousands of people will pay millions. It means children will always be exploited since there’s tons of money to be made.
- toomuchtodo 7y ago
  While we cannot drive suffering down to zero, we can still make efforts to drive it down as close to zero as possible.
  - sysbin 7y ago
    It would be interesting to know if suffering has increased or decreased over the years and while the extra measures are being put in place. I agree with your opinion btw. I'm just skeptical if for all we know there is now more suffering than before because of the internet.
    - toomuchtodo 7y ago
      The world has been getting better objectively. https://www.vox.com/2014/11/24/7272929/global-poverty-health-crime-literacy-good-news https://www.vox.com/2014/11/24/7272929/global-poverty-health...
      - minblaster 7y ago
        Unfortunately, some relative comparisons don't matter as much as the absolute. A world where the number of slaves is objectively increasing (as it has now) is worse I'd say. The total amount of suffering is more, even if there are billions more happy people oblivious to your plight.
        deleted 7y ago
        [deleted]
  - moomin 7y ago
johnzim 7y ago
I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger! All Law Enforcement has ever needed to do is trace back the transactions - something that's almost impossible with conventional currencies. Heck the equitable principle of 'Tracing' exists in Law because it's normally impossible to do that once monies have intermingled. The sheer practicality of it is demonstrated in the fact that it's only worthwhile or practicable for Law Enforcement to investigate _large-scale_ money-laundering operations. Yet with Bitcoin you can essentially read back the exact history of every single satoshi.
- capableweb 7y ago
  Because it's often enough to ensure you're anonomous when transfering to/from $GOVERNMENT_CURRENCY (in person meetings in the woods for example) for the transactions to be untracable.
  - avar 7y ago
    Or, buying BTC via a credit card from an exchange in a legal jurisdiction local police isn't going to bother with, so the money->BTC trace is lost. Tracing transactions in a local currency is a lot easier than having to issue warrants over international borders.
    - capableweb 7y ago
      No, don't do that. You don't want any data about the transfer, period. Even if no one can see it now, you should assume (given you want to hide what you're doing) that any trace you leave, wherever, will eventually become public or seen by the one you're trying to hide from. The only way to make yourself untracable is to leave no trace
      - Consultant32452 7y ago
        How does one acquire BTC without any trace? Around here there's BTC ATMs that will accept cash in exchange for coins, but I assume those have cameras on them to record in the event of a theft.
badloginagain 7y ago
Does lack of anonymity affect BitCoin fungibility? If you are using coin known to be used for illegal means, does it taint the coin?
- lacker 7y ago
  It has some effect. If you deposit bitcoin into an exchange and it's coming from an address that's associated with a hack or other criminal activity, it's more likely to get flagged. It's hard to say for sure, though. Different exchanges probably use different mechanisms.
- rolltiide 7y ago
  When the state seizes the coins they are magically clean at this point and are put back into circulation via the auction process. Not all states will respect that so yes chainanalysis software will have to be updated to account for that and it does affect the fungibility
yesmodsdeleteme 7y ago
Deep fake child porn is pretty much possible. It's another ethical quandary but certainly fake child porn is better for children then real child porn.
dmos62 7y ago
The thing that gets you when you realise it is that most of the criminals that get discovered/prosecuted are discovered because they were doing something stupid, like using the equivalent of a public ledger to make transactions. You don't hear a lot of stories about smart criminals getting caught.
- ashleyn 7y ago
  Conventionally, I always figured if one were that smart they would realise crime wasn't a good cost-benefit balance in the first place.
  - rolph 7y ago
    to quote bruce waynes butler alfred: "Some men just want to see the world burn."
  - saagarjha 7y ago
    I'm sure there's always the possibility of arbitrage, since the payout from crime changes constantly and laws (and law enforcement) struggle to keep up.
  - AllanHoustonSt 7y ago
    If we're talking purely financial cost benefit considerations I'm not sure (and also curious) if that's actually true.
  - bytematic 7y ago
    The brain is a crazy thing. People can be smart and still make terrible decisions, whether that be caused by mental illness, emotions, etc.
  - rabidrat 7y ago
    or they would find the crimes with a great cost-benefit and become billionaires.
    - api 7y ago
deleted 7y ago
[deleted]
technonerd 7y ago
Was there any usage of coinjoin in the tracking of the bitcoins? Where are the gritty details of this case?
JoeSmithson 7y ago
While the owner of the site was indicted in the US today, the taskforce that ran this operation was international and not led by the US - https://pbs.twimg.com/media/EHAgtm_XUAALDz7?format=jpg&name=medium https://pbs.twimg.com/media/EHAgtm_XUAALDz7?format=jpg&name=...
teh_infallible 7y ago
The site says users spent millions of dollars, but they only arrested 337 people. Did they only arrest a small percentage, or were these some really rich scumbags?
- codezero 7y ago
  Seems unlikely they'd get everyone, but keep in mind, millions divided by several hundreds is only thousands per person over some months/years. Edit: and given that they have rescued dozens of abused children, I assume they optimized for active abusers, but were happy to scoop up anyone else who surfaced in their investigation.
- woodandsteel 7y ago
  Maybe this is only the first round, and there will be a lot more arrests in the future.
TracePearson 7y ago
I wonder if there will be increased interest in more privacy focused cryptocurrencies like Monero? I don't follow this news closely so I am genuinely curious if anyone has any insights.
- woah 7y ago
  I’ve heard that some vendors on drug marketplaces take Monero
  - RandomBacon 7y ago
    I thought I saw a chart where it was the second-most-accepted coin, but I couldn't find it, so I may be wrong. I did find a chart where it is the 4th most accepted after BTC, LTC, and ETH. I imagine those other coins are more accepted because they have larger network effects. I also imagine that Monero's network will grow even more as it becomes more developed.
cybersnowflake 7y ago
If Bitcoin isn't private and LE can still nab users whenever they feel like what is it good for? Whats the point? Might as well go back to the dollar.
biolurker1 7y ago
good, they could never trace dollars
ddtaylor 7y ago
> Among the 36 Americans named in the indictment, at least three were federal law enforcement employees who had been arrested earlier in this long-term investigation.
- spamizbad 7y ago
  Makes sense: Being a law enforcement officer makes it easier to earn the trust of strange child while also threatening them into silence. If you get caught you can just blame it Black Lives Matter or something and have your union provide a vigorous defense free of charge.
- acollins1331 7y ago
  Seems like an abnormally high proportion. Hopefully it's just because of a small sample size and not indicative of a Catholic church level cover-up in our law enforcement circles.
  - trhway 7y ago
    You probably missed all those East Bay cops across several cities serving and protecting in a very specific way that underage prostitute. Statistic wise they seem to have beaten the Church, and the most of those cops are still cops there, in particular because there were "insufficient evidence that they knew that the girl was under 18" as were concluded by the judge in a dismissed case against one of the officers.
    - vageli 7y ago
      Can you link to a source? As I understand it, lack of knowledge of age is not a defense against statutory rape.
      - magduf 7y ago
        Laws are frequently different for cops.
      - trhway 7y ago
kgwgk 7y ago
Matt Levine, today: ‘One of the weirdest things in recent financial/criminal history is that for a while people really believed that Bitcoin, an electronic payments method that creates a permanent, traceable, public record of all transactions and links them to identifiable accounts, was somehow a good way to pay for crime. “It’s completely anonymous,” people thought, “like digital cash, but you can send it anywhere and no one will be able to trace you.” Not really! I suppose it was even true for a little while, but eventually law enforcement agencies figured out how to trace Bitcoin transactions, and then the fact that years’ worth of criminal financial transactions were just forever openly available to them on the Bitcoin blockchain was … bad for criminals.‘
- onion2k 7y ago
  I wonder if the media around BTC being anonymous and untraceable was actually encouraged by the intelligence community and law enforcement. It's certainly been a boon for tracking down a lot of criminals.
  - kgwgk 7y ago
    In that spirit, Levine ends his comment as follows: ‘Do you think maybe Satoshi Nakamoto works for the FBI, and invented Bitcoin as a way to get criminals to make a convenient permanent record of their transactions?’
    - bhaak 7y ago
      The idea that Satoshi is not one person but a group at the NSA has been going around for a long time. I don't think it's likely true but it's an entertaining gedanken experiment.
      - sorum 7y ago
        Now that is a movie script that almost writes itself
    - deleted 7y ago
      [deleted]
quux 7y ago
Seems like a good way to frame someone?
fencepost 7y ago
The two things that really jumped out at me was that they were able to rescue a bunch of children being abused (probably at least one in the US since one of the LE officers was charged with producing) and that a huge percentage of the content they found was previously unknown. The impression I've gotten from stories in the past is that there's a lot of child abuse material that has been circulating for years, so taking down producers is a big deal.
- jammygit 7y ago
  I feel for the agents who have to spend time on those sites to investigate them. I’d be traumatized having to watch things like that for work
samstave 7y ago
Why do constantly hear things like this and see so few actual people come down, and when they do they are immediately epsteined.
ikeboy 7y ago
It's somewhat surprising this hasn't happened earlier. They've been tracking these things for years, surely not everyone has been careful enough to keep it hidden.
- dbancajas 7y ago
  Maybe they needed to delay it to keep the show going and take down the whale doing this aka "playing the long game."
  - ikeboy 7y ago
    Nah, they've taken down many others using different methods. Besides there's several competing organizations trying to take stuff down from different countries.
werber 7y ago
I’ve never used bitcoin, but everyone I know closely that does uses it for drugs, and when someone who doesn’t do drugs is about it I always have this nagging feeling their investment is just to cover up a child porn thing. It’s for sure a prejudice, but i can’t shake it
- nyolfen 7y ago
  this is much more likely the reason: https://cointelegraph.com/storage/uploads/view/4c43c9a089d2e69773a2d208c6e0a647.png https://cointelegraph.com/storage/uploads/view/4c43c9a089d2e...
- StanislavPetrov 7y ago
  You should make friends with more gamblers.
deleted 7y ago
[deleted]
billf1953 7y ago
I must be missing something, I buy Bitcoin with a USD bank account, I send to another address and then this address sends to a known drug dealer. How do they establish the second address's identity?
- kristianp 7y ago
  I guess the investigators found out somehow, for example by looking at transactions on a computer already seized for realayed investigations. Also by sending bitcoin to the service themselves, the investigators could trace the flow of coins into addresses used by the dealers to spend their bitcoins. Then backwards from there to other users payments.
calimac 7y ago
Has anyone else noticed the massive increase in pedophile arrests since 2017. Like him or not; Trump is hunting these pedophiles and making the world a safer place for kids.
AtlasBarfed 7y ago
Holy crap, straight out of Law and Order plots, a former HSI agent was caught in the investigation, if I read this correctly: HSI computer forensic examiners found more than 1,000 images and 125 videos depicting the sexual victimization of children on Pannell’s home-built tower computer. The images and videos depicted pre-pubescent girls, including toddlers, engaged in sexual acts with adults. Pannell faces five to 20 years in prison, up to a life term of supervised release, and a $250,000.00 fine, as well as registering as a sex offender. U.S. District Judge Greg G. Guidry will sentence him on Dec. 17. Former HSI agent Richard Nikolai Gratkowski, 40 at the time, was sentenced in May to 70 months in federal prison on child pornography charges. The investigation showed that Gratkowski, in San Antonio, received hundreds of videos of pre-pubescent children engaged in a variety of sexual acts and had also bought access with cryptocurrency.
mindfulplay 7y ago
And we have VCs chiming Bitcoin as the hero coin and create new crap coins. Unregulated markets and freeflowing VC money: what could go wrong?
nnain 7y ago
This is so disheartening. 6-20 yrs is not enough prison time. This isn't acceptable. Law makers around the globe need to rewrite the punishments for these crimes. Child abuse seems to be much higher than older days. As much as I love tech community, it's sad to see how most comments here are discussing the technical details of the case and not enough outraged by it? > I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. > I don't think Bitcoin can be anonymous if it goes through an exchange. > This is why you should exchange your Bitcoin to Monero. > How do they establish the second address's identity? > good, they could never trace dollars
- hackinthebochs 7y ago
  >6-20 yrs is not enough prison time. It's plenty of time. This idea that just increasing sentences indefinitely will improve things is wrong. The endless ratcheting of sentencing is wrong. 20 years seems low only because we've become so desensitized to absurdly long sentences that comparatively this seems low. Americans need to change their relationship with justice and punishment.
  - nnain 7y ago
    Don't know if you're talking only in terms of US prison system; US has a whole different problem there. Leaving such corrupted/psychopathic people out in public is hopelessly dangerous. ANYONE who has violated a child's life in this way doesn't deserve a second chance. They have spoilt several lives already till now.

230 points by srameshc 7y ago

SI_Rob 7y ago

so the anonymity is pseudo, whereas the pedophilia is real?

fooker 7y ago
Nobody has seriously claimed that Bitcoin is anonymous.
- jjulius 7y ago
  Be careful speaking in such absolutes as "nobody". Back when Silk Road was all the buzz, people who may've lacked the same technical knowledge you and I have would claim that using Bitcoin on Silk Road was an anonymous way to pay for what you bought.
- dragontamer 7y ago
  Not BTC being anonymous, but that BTC "mixer" services would anonymize the data in an untrackable way. I never trusted the mixers personally. But it was a hot debate item a few years back whether or not law enforcement could track transactions through a mixer. Its always been my firm belief that a mixer was just automated money laundering and probably puts you up for legal scrutiny as well. But we'll see how the FBI decides to handle those...
  - tempsy 7y ago
    It's relatively easy to identify mixers, so by sending money to a mixer you immediately flag your sending account as high risk...
    - jandrese 7y ago
      More importantly receiving money from a mixer could taint your wallet for converting the bitcoins into real money. KYC laws kick in. It's easy to check if you've ever had coins from a mixer enter your wallet. The idea that your transactions are mixed up and impossible to track doesn't matter so much if they just assume everybody who uses a mixer is a criminal.
      - __s 7y ago
        You can't reject someone depositing to your address. So a tumbler can taint whichever addresses it pleases You aren't tracking coins with the ledger, only totals. So address A can have 10 btc, tumbler adds 5 to A, then A transfers 5 to B, 5 to C. If C is an exchange, does it consider that A is still holding 5 tumbled coins? Or does it say B has the tumbled coins? Or does it reject A's offer of 5? Feel free to shift values such as A having 100 BTC, receiving 0.01 tumbled BTC, & wanting to send 1 BTC to exchange Also hard to track something like A sending tumbled coins to B, which triggers the owner of B to have C send non tumbled coins to D. You can even have this service offered at an exchange rate, so D receives less than B did
        jandrese 7y ago
        Easiest solution is to just taint any wallet that has ever had a coin from a known tumbler added to it. It's harsh and a malicious tumbler could mess up famous wallets, but easy to implement and "safe" to a point. A harder solution only allows them to withdraw up to the number of coins you can verify were not tumbled. So if some malicious tumbler deposits 0.000001 coin in your wallet you can convert all but 0.000001 of your wallet's value at an exchange.
    - steveeq1 7y ago
      You get around that by converting from btc to monero and then back again. Either through bisq or through xmr.to. "mixers" are obsolete now because it's a central point of failure.
      - 7y ago
  - hn_throwaway_99 7y ago
    Are any of the mixers still up? I remember about a year ago when one of the most popular ones abruptly shut down when it became clear the government would go after him for abetting money laundering if he continued.
    - lacker 7y ago
      Yeah. There was a leak recently from a Chainalysis employee who claimed that they were unable to trace transactions through the Wasabi wallet, which is a wallet that integrates a coinjoin mixer. I think there are other coinjoin-based mixer services operating.
      - RandomBacon 7y ago
        A supposed employee in an unverified AMA.
        steveeq1 7y ago
        yeah, but he knew his stuff so it at least sounds plausible
- simias 7y ago
  I'm pretty sure by now somebody has seriously claimed that Bitcoin cures cancer, speaks Romanian and cure male pattern baldness. Anonymity and protection from the Big Bad Government were definitely talking points used by many cryptocurrency enthusiasts. "It can't be banned and can't be seized", rings a bell? Except of course if the Big Bad Government comes knocking at your door and tells you to hand your wallet over "or else".
  - steveeq1 7y ago
    And how are they going to know you even HAVE a wallet? There are anonymization techniques like wasabi and monero that are fairly trivial to use. It's basically like trying to outlaw software piracy, it's a hard sell.
  - fooker 7y ago
    > Can't be banned This part is sort of true. A government can ban fiat <-> BTC conversion but there isn't really a way to stop people from providing services in exchange for BTC.
- quickthrower2 7y ago
  I think anonymous/not anonymous binary distinction is too black/white. Bitcoin is more anonymous than a bank transaction. If I buy something with a credit card, they have my credit card number that is easily linked to me. With Bitcoin it is less easy. Unfortunately with Bitcoin once you have been 'revealed' then your transaction 'graph' is then revealed in the public, whereas the credit card doesn't have that problem. It depends who you want to be anonymous from. Governments can easily get bank transactions, and also they can investigate bitcoin-based crime and then just trace the public ledger. Businesses will not easily get bank transactions or map general bitcoin addresses to people, but if you use a credit card you tend to have to give them a lot of other matching information such as your name and address, whereas with bitcoin you don't need to give them anything. Assuming there is no delivery involved it can be pretty anonymous. But again if they did happen to pattern match (maybe they have another customer who you have dealt with too) they could join some dots. But to be safe it's best to assume Bitcoin is not anonymous and that anyone can find out eventually where you have spent your money.
NikolaeVarius 7y ago
From the very beginning, bitcoin never promised fully untraceable and anonymous transactions.
- wcoenen 7y ago
  Section 10 of the original white paper is about privacy. It imagined bitcoin transactions being public, but still about as private as stock trading transactions that are published on a ticker tape. http://bitcoin.org/bitcoin.pdf http://bitcoin.org/bitcoin.pdf Bitcoin transactions turned out to be a great deal less private than that, because separate transactions from the same wallet can be linked via the change outputs (unlike separate trades on a ticker tape).
rolltiide 7y ago
SHUM should have used monero There is a reason that many darknet markets have it as an option and some use it exclusively
- ratsmack 7y ago
  What makes Monero different than Bitcoin?
  - simias 7y ago
    It effectively embeds a coin mixer in every transaction, so to speak. In bitcoin you can trace transactions from one account to the next in the public ledger, with Monero theoretically you won't be able to follow the funds quite as easily. Of course it remains to be seen if it really works if some three-letter organization really wants to figure out who you are.
    - rolltiide 7y ago
      Does it remain to be seen? There have been busts and indictments where the state was not able to determine anything about the Monero wallet that were also seized in the operation
      - chrshawkes 7y ago
        Can't the data just be taken directly from the ISP connecting to whatever crypto services are out there? If the FBI really wanted to get that info, I would think they can track all activity from the main hub directly.
        steveeq1 7y ago
        It's encrypted, so no.
        rolltiide 7y ago
        Monero nodes see IP addresses, but they do not see the sender's crypto address, and they do not see the receiver's crypto address. So in its current state, ISPs would only know what someone has launched a Monero wallet at some point in time. Using Monero is completely benign. In its also current but also upcoming state, Monero clients automatically connect to TOR or I2P. So a Monero node would not know your IP address and an ISP therefore would not either. Monero exchanges are merely Monero clients, and a Monero client knows its own address, and it knows the address the sender told it to send to which would be the receiver. But neither of these addresses are ever seen on the blockchain, and the receiver's Monero client does not know which address sent to it. Since the receiver's client doesn't reveal which address sent to it, and there is no passive blockchain sleuthing possible, and the nodes don't see any of this either, there is very little the FBI could do if users are following best practices which are the default behaviors of this network. Non-default behavior would be users that rely on exchanges exclusively: they send their 2 Monero from one exchange to another exchange. Exchange 1 is an account that belongs to the user, and it knows the address of Exchange 2. Exchange 2 is an account that belongs to the user, and it only has the same balance and transaction id as Exchange 1's send. The FBI happened to have subpoena'd both exchanges and found the same transaction id. Improbable now, but it could happen anytime in the future. When the user adds their own Monero client into the mix (exchange 1 - client - exchange 2, + time + different amounts), this gets exponentially more difficult as you already need access to the user, the subpoena, and their Monero client. There are many barriers to getting that, especially in the face of benign economic activity, and the blockchain itself doesn't help. You also aren't supposed to re-use addresses. This is true for Bitcoin and all cryptocurrencies. It means that an exchange wouldn't even know if you were sending to yourself, one of your other wallets, to a vendor to pay someone, or what. With Monero none of those recipients know who sent to them.

5822130027 7y ago

Doesn't it mean bitcoin HELPs to catch criminals instead of helping them ? If bitcoin was more widely used - wouldn't it be a dream come true for every wannabe Stasi/Gestapo organization ?

gricardo99 7y ago
I've made this exact point before as well. High on the wish list of any authoritarian/repressive regime would be a monetary system where all economic activity and transaction is visible to them.
- rolph 7y ago
  this is is why cashless, is a big issue. there was a submission here a bit ago regarding canadian banking systems wanting to go no cash, and mandate electronic purchase and payment. we have seen economic collapse and what it looks like. if physical banknotes are not available, we use cigarettes, vodka, and tampons. I think those things are fairly untraceable
  - djmips 7y ago
    I recall that it was reported that Tide laundry detergent was being used as a currency for drug deals. http://nymag.com/news/features/tide-detergent-drugs-2013-1/ http://nymag.com/news/features/tide-detergent-drugs-2013-1/
KingMachiavelli 7y ago
Perhaps on a technical level it's easier to access the Bitcoin ledger than bank records but LE has far more experience with the later. Also, if you solely receive and send bitcoin outside of an exchange, you can easily remain pseudo-anonymous in that anyone can see that wallet X has received Y bitcoins and send W bitcoins but without a person attached to the wallet, it's useless information. This is way crypto currencies are regulated at the edges, if fiet to crypto is watched just like any other bank/exchange, then criminal activity has a hard time getting money out. At the end of the day, it's difficult to buy 'real' things; food, clothing, housing with bitcoin.

catalogia 7y ago

> " Law enforcement was able to trace payments of bitcoin to the Darknet site by following the flow of funds on the blockchain. Separately, Chainalysis said it was their Chainalysis Reactor software used to analyze the blockchain transactions." By design, bitcoin uses a public ledger. This sort of investigation being possible shouldn't catch anybody by surprise.

sixstringtheory 7y ago
Wouldn't it be amazing if years from now, we found out that Satoshi Nakamoto was an intelligence agent, and that there was a massive state-backed social media campaign to convince the dark web to use Bitcoin, for this very reason?
- mdni007 7y ago
  It's an already known fact that Satoshi Nakamoto's real name is Steven Nathaniel and is my uncle who works for Nintendo.
  - sixstringtheory 7y ago
    If that's true, you could consider updating the Wikipedia page [0] for him! In any case, that's what I get for only checking Wikipedia, but I didn't follow that particular drama closely in the first place. [0]: https://en.wikipedia.org/wiki/Satoshi_Nakamoto https://en.wikipedia.org/wiki/Satoshi_Nakamoto

jtbayly 7y ago

> In cases where that was insufficient, account information combined with open source intelligence and standard investigative techniques were enough to identify users. What is open source intelligence?

maximente 7y ago
the wiki article is solid: https://en.wikipedia.org/wiki/Open-source_intelligence https://en.wikipedia.org/wiki/Open-source_intelligence
skeptical900067 7y ago
Iirc OSINT is information that is intentionally publically available, like county arrest records.
33degrees 7y ago
Intelligence based on public sources as opposed to clandestine ones. Nothing to do with open source software.
deleted 7y ago
[deleted]

ratsmack 7y ago

I don't think Bitcoin can be anonymous if it goes through an exchange, because you have to create an account with identifying information. I you host the endpoint yourself, it may be possible to completely mask the source, but I'm really not sure.

dmos62 7y ago
Yes, Bitcoin is anonymous only under certain circumstances. You can get Bitcoin anonymously, and you can make transactions anonymously, but it takes know-how
rtkwe 7y ago
In theory a tumbler could disconnect the identify information even on coins bought initially on an exchange with KYC compliance. Not sure if anyone's figured out how to track transactions through those yet with just public info from the blockchain. (I imagine they'd keep it pretty quiet if they had)
- mmcwilliams 7y ago
  This assumes that the operators of the tumblers are to be trusted and aren’t state actors themselves. It would be a pretty smart move for the Feds to run one or more of those operations.
  - bredren 7y ago
    Coinjoin is an ongoing attempt to remove centralization from tumblers: https://en.bitcoin.it/wiki/CoinJoin https://en.bitcoin.it/wiki/CoinJoin
    - vkou 7y ago
      It will take a stroke of a pen for the US Government to require that exchanges do not accept any coins that have gone through a known tumbler after <certain date> Imagine a money laundering operation, where every laundered physical dollar gets a physical stamp of 'THIS CAME THROUGH A MONEY LAUNDERING OPERATION'. That's the current state of BitCoin tumblers.

cheez 7y ago

There is a dead comment on this thread which is suggesting that Bitcoin is more useful than any other form of money for law enforcement because it is only pseudo-anonymous. I'm not sure why it is dead (perhaps the reference to Stasi/etc) but I think this is a valid point and is why I didn't buy more than a few hundred in Bitcoin many years ago to get a feel for the currency. I gave it all away because I did not believe it is a valid form of money.

codezero 7y ago
The poster has negative karma over-all so I think that might have affected it. I vouched for the comment and it looks un-dead now :)
- cheez 7y ago
  You are a saint

nullbyte 7y ago

This is why you should exchange your Bitcoin to Monero. Transfer the value to another anonymized blockchain and make future transactions nearly impossible to track.

moocowtruck 7y ago
we actually track a large list of digital currency, more and more each week and there is a ton of funding more than we'd ever expect being given for getting anything we need done, i dont see it really as an issue.. digital currency has been great for us
- tmoravec 7y ago
  I'm very skeptical that you're tracing Monero. Unless you've broken ed25519, that is. In which case, you have better things to do than crack minor cryptocurrency transactions...
  - hackinthebochs 7y ago
    There are a lot of weak links in Monero that have nothing to do with breaking ed25519.
    - Forbo 7y ago
      Namely?
      - hackinthebochs 7y ago
        Ring signature size is still a problem. Yes, it masks the originating address of a transaction. But you know its 1 of N (currently 11 I think?). We know that most people buy coins from exchanges and then send them to their destination. An authority can simply subpoena every top exchange for users for whom any one of the addresses in the ring signature belong to. That's 11 addresses. If we assume the user may have made an intermediate transaction, we can go up two levels. That's 11^2 addresses. Three levels, 11^3. Given normal people's typical usage, monero's anonymity falls to broad subpoena power.

xenospn 7y ago

It honestly breaks my heart to know that there is such massive demand for these videos, where thousands of people will pay millions. It means children will always be exploited since there’s tons of money to be made.

toomuchtodo 7y ago
While we cannot drive suffering down to zero, we can still make efforts to drive it down as close to zero as possible.
- sysbin 7y ago
  It would be interesting to know if suffering has increased or decreased over the years and while the extra measures are being put in place. I agree with your opinion btw. I'm just skeptical if for all we know there is now more suffering than before because of the internet.
  - toomuchtodo 7y ago
    The world has been getting better objectively. https://www.vox.com/2014/11/24/7272929/global-poverty-health-crime-literacy-good-news https://www.vox.com/2014/11/24/7272929/global-poverty-health...
    - minblaster 7y ago
      Unfortunately, some relative comparisons don't matter as much as the absolute. A world where the number of slaves is objectively increasing (as it has now) is worse I'd say. The total amount of suffering is more, even if there are billions more happy people oblivious to your plight.
      - deleted 7y ago
        [deleted]
- moomin 7y ago

johnzim 7y ago

I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. The entire transaction history is literally encoded in a public ledger! All Law Enforcement has ever needed to do is trace back the transactions - something that's almost impossible with conventional currencies. Heck the equitable principle of 'Tracing' exists in Law because it's normally impossible to do that once monies have intermingled. The sheer practicality of it is demonstrated in the fact that it's only worthwhile or practicable for Law Enforcement to investigate _large-scale_ money-laundering operations. Yet with Bitcoin you can essentially read back the exact history of every single satoshi.

capableweb 7y ago
Because it's often enough to ensure you're anonomous when transfering to/from $GOVERNMENT_CURRENCY (in person meetings in the woods for example) for the transactions to be untracable.
- avar 7y ago
  Or, buying BTC via a credit card from an exchange in a legal jurisdiction local police isn't going to bother with, so the money->BTC trace is lost. Tracing transactions in a local currency is a lot easier than having to issue warrants over international borders.
  - capableweb 7y ago
    No, don't do that. You don't want any data about the transfer, period. Even if no one can see it now, you should assume (given you want to hide what you're doing) that any trace you leave, wherever, will eventually become public or seen by the one you're trying to hide from. The only way to make yourself untracable is to leave no trace
    - Consultant32452 7y ago
      How does one acquire BTC without any trace? Around here there's BTC ATMs that will accept cash in exchange for coins, but I assume those have cameras on them to record in the event of a theft.

badloginagain 7y ago

Does lack of anonymity affect BitCoin fungibility? If you are using coin known to be used for illegal means, does it taint the coin?

lacker 7y ago
It has some effect. If you deposit bitcoin into an exchange and it's coming from an address that's associated with a hack or other criminal activity, it's more likely to get flagged. It's hard to say for sure, though. Different exchanges probably use different mechanisms.
rolltiide 7y ago
When the state seizes the coins they are magically clean at this point and are put back into circulation via the auction process. Not all states will respect that so yes chainanalysis software will have to be updated to account for that and it does affect the fungibility

yesmodsdeleteme 7y ago

Deep fake child porn is pretty much possible. It's another ethical quandary but certainly fake child porn is better for children then real child porn.

dmos62 7y ago

The thing that gets you when you realise it is that most of the criminals that get discovered/prosecuted are discovered because they were doing something stupid, like using the equivalent of a public ledger to make transactions. You don't hear a lot of stories about smart criminals getting caught.

ashleyn 7y ago
Conventionally, I always figured if one were that smart they would realise crime wasn't a good cost-benefit balance in the first place.
- rolph 7y ago
  to quote bruce waynes butler alfred: "Some men just want to see the world burn."
- saagarjha 7y ago
  I'm sure there's always the possibility of arbitrage, since the payout from crime changes constantly and laws (and law enforcement) struggle to keep up.
- AllanHoustonSt 7y ago
  If we're talking purely financial cost benefit considerations I'm not sure (and also curious) if that's actually true.
- bytematic 7y ago
  The brain is a crazy thing. People can be smart and still make terrible decisions, whether that be caused by mental illness, emotions, etc.
- rabidrat 7y ago
  or they would find the crimes with a great cost-benefit and become billionaires.
  - api 7y ago

deleted 7y ago

[deleted]

technonerd 7y ago

Was there any usage of coinjoin in the tracking of the bitcoins? Where are the gritty details of this case?

JoeSmithson 7y ago

While the owner of the site was indicted in the US today, the taskforce that ran this operation was international and not led by the US - https://pbs.twimg.com/media/EHAgtm_XUAALDz7?format=jpg&name=medium https://pbs.twimg.com/media/EHAgtm_XUAALDz7?format=jpg&name=...

teh_infallible 7y ago

The site says users spent millions of dollars, but they only arrested 337 people. Did they only arrest a small percentage, or were these some really rich scumbags?

codezero 7y ago
Seems unlikely they'd get everyone, but keep in mind, millions divided by several hundreds is only thousands per person over some months/years. Edit: and given that they have rescued dozens of abused children, I assume they optimized for active abusers, but were happy to scoop up anyone else who surfaced in their investigation.
woodandsteel 7y ago
Maybe this is only the first round, and there will be a lot more arrests in the future.

TracePearson 7y ago

I wonder if there will be increased interest in more privacy focused cryptocurrencies like Monero? I don't follow this news closely so I am genuinely curious if anyone has any insights.

woah 7y ago
I’ve heard that some vendors on drug marketplaces take Monero
- RandomBacon 7y ago
  I thought I saw a chart where it was the second-most-accepted coin, but I couldn't find it, so I may be wrong. I did find a chart where it is the 4th most accepted after BTC, LTC, and ETH. I imagine those other coins are more accepted because they have larger network effects. I also imagine that Monero's network will grow even more as it becomes more developed.

cybersnowflake 7y ago

If Bitcoin isn't private and LE can still nab users whenever they feel like what is it good for? Whats the point? Might as well go back to the dollar.

biolurker1 7y ago

good, they could never trace dollars

ddtaylor 7y ago

> Among the 36 Americans named in the indictment, at least three were federal law enforcement employees who had been arrested earlier in this long-term investigation.

spamizbad 7y ago
Makes sense: Being a law enforcement officer makes it easier to earn the trust of strange child while also threatening them into silence. If you get caught you can just blame it Black Lives Matter or something and have your union provide a vigorous defense free of charge.
acollins1331 7y ago
Seems like an abnormally high proportion. Hopefully it's just because of a small sample size and not indicative of a Catholic church level cover-up in our law enforcement circles.
- trhway 7y ago
  You probably missed all those East Bay cops across several cities serving and protecting in a very specific way that underage prostitute. Statistic wise they seem to have beaten the Church, and the most of those cops are still cops there, in particular because there were "insufficient evidence that they knew that the girl was under 18" as were concluded by the judge in a dismissed case against one of the officers.
  - vageli 7y ago
    Can you link to a source? As I understand it, lack of knowledge of age is not a defense against statutory rape.
    - magduf 7y ago
      Laws are frequently different for cops.
    - trhway 7y ago

kgwgk 7y ago

Matt Levine, today: ‘One of the weirdest things in recent financial/criminal history is that for a while people really believed that Bitcoin, an electronic payments method that creates a permanent, traceable, public record of all transactions and links them to identifiable accounts, was somehow a good way to pay for crime. “It’s completely anonymous,” people thought, “like digital cash, but you can send it anywhere and no one will be able to trace you.” Not really! I suppose it was even true for a little while, but eventually law enforcement agencies figured out how to trace Bitcoin transactions, and then the fact that years’ worth of criminal financial transactions were just forever openly available to them on the Bitcoin blockchain was … bad for criminals.‘

onion2k 7y ago
I wonder if the media around BTC being anonymous and untraceable was actually encouraged by the intelligence community and law enforcement. It's certainly been a boon for tracking down a lot of criminals.
- kgwgk 7y ago
  In that spirit, Levine ends his comment as follows: ‘Do you think maybe Satoshi Nakamoto works for the FBI, and invented Bitcoin as a way to get criminals to make a convenient permanent record of their transactions?’
  - bhaak 7y ago
    The idea that Satoshi is not one person but a group at the NSA has been going around for a long time. I don't think it's likely true but it's an entertaining gedanken experiment.
    - sorum 7y ago
      Now that is a movie script that almost writes itself
  - deleted 7y ago
    [deleted]

quux 7y ago

Seems like a good way to frame someone?

fencepost 7y ago

The two things that really jumped out at me was that they were able to rescue a bunch of children being abused (probably at least one in the US since one of the LE officers was charged with producing) and that a huge percentage of the content they found was previously unknown. The impression I've gotten from stories in the past is that there's a lot of child abuse material that has been circulating for years, so taking down producers is a big deal.

jammygit 7y ago
I feel for the agents who have to spend time on those sites to investigate them. I’d be traumatized having to watch things like that for work

samstave 7y ago

Why do constantly hear things like this and see so few actual people come down, and when they do they are immediately epsteined.

ikeboy 7y ago

It's somewhat surprising this hasn't happened earlier. They've been tracking these things for years, surely not everyone has been careful enough to keep it hidden.

dbancajas 7y ago
Maybe they needed to delay it to keep the show going and take down the whale doing this aka "playing the long game."
- ikeboy 7y ago
  Nah, they've taken down many others using different methods. Besides there's several competing organizations trying to take stuff down from different countries.

werber 7y ago

I’ve never used bitcoin, but everyone I know closely that does uses it for drugs, and when someone who doesn’t do drugs is about it I always have this nagging feeling their investment is just to cover up a child porn thing. It’s for sure a prejudice, but i can’t shake it

nyolfen 7y ago
this is much more likely the reason: https://cointelegraph.com/storage/uploads/view/4c43c9a089d2e69773a2d208c6e0a647.png https://cointelegraph.com/storage/uploads/view/4c43c9a089d2e...
StanislavPetrov 7y ago
You should make friends with more gamblers.

deleted 7y ago

[deleted]

billf1953 7y ago

I must be missing something, I buy Bitcoin with a USD bank account, I send to another address and then this address sends to a known drug dealer. How do they establish the second address's identity?

kristianp 7y ago
I guess the investigators found out somehow, for example by looking at transactions on a computer already seized for realayed investigations. Also by sending bitcoin to the service themselves, the investigators could trace the flow of coins into addresses used by the dealers to spend their bitcoins. Then backwards from there to other users payments.

calimac 7y ago

Has anyone else noticed the massive increase in pedophile arrests since 2017. Like him or not; Trump is hunting these pedophiles and making the world a safer place for kids.

AtlasBarfed 7y ago

Holy crap, straight out of Law and Order plots, a former HSI agent was caught in the investigation, if I read this correctly: HSI computer forensic examiners found more than 1,000 images and 125 videos depicting the sexual victimization of children on Pannell’s home-built tower computer. The images and videos depicted pre-pubescent girls, including toddlers, engaged in sexual acts with adults. Pannell faces five to 20 years in prison, up to a life term of supervised release, and a $250,000.00 fine, as well as registering as a sex offender. U.S. District Judge Greg G. Guidry will sentence him on Dec. 17. Former HSI agent Richard Nikolai Gratkowski, 40 at the time, was sentenced in May to 70 months in federal prison on child pornography charges. The investigation showed that Gratkowski, in San Antonio, received hundreds of videos of pre-pubescent children engaged in a variety of sexual acts and had also bought access with cryptocurrency.

mindfulplay 7y ago

And we have VCs chiming Bitcoin as the hero coin and create new crap coins. Unregulated markets and freeflowing VC money: what could go wrong?

nnain 7y ago

This is so disheartening. 6-20 yrs is not enough prison time. This isn't acceptable. Law makers around the globe need to rewrite the punishments for these crimes. Child abuse seems to be much higher than older days. As much as I love tech community, it's sad to see how most comments here are discussing the technical details of the case and not enough outraged by it? > I have never understood the appeal of BitCoin as a means of purchasing or selling illegal materials. > I don't think Bitcoin can be anonymous if it goes through an exchange. > This is why you should exchange your Bitcoin to Monero. > How do they establish the second address's identity? > good, they could never trace dollars

hackinthebochs 7y ago
>6-20 yrs is not enough prison time. It's plenty of time. This idea that just increasing sentences indefinitely will improve things is wrong. The endless ratcheting of sentencing is wrong. 20 years seems low only because we've become so desensitized to absurdly long sentences that comparatively this seems low. Americans need to change their relationship with justice and punishment.
- nnain 7y ago
  Don't know if you're talking only in terms of US prison system; US has a whole different problem there. Leaving such corrupted/psychopathic people out in public is hopelessly dangerous. ANYONE who has violated a child's life in this way doesn't deserve a second chance. They have spoilt several lives already till now.