A stunning blow was just dealt to the argument that “Bitcoin makes it easier for criminals to do business” as the largest child porn site was just shutdown.
A South Korean Citizen was indicted by a U.S. federal grand jury for operating this massive site where users could pay for the illicit content using Bitcoin. The site, Welcome to Video, was being run by Jong Woo Son, a 23 year old South Korean national who is already in custody and being charged by his home country.
Additionally, 337 site users from 11 countries around the world (and 22 states within the U.S.) were arrested. There is a forfeiture complaint currently in progress that seeks to recover the funds used in the child pornography distribution operation and return them to victims of the crimes committed on the website.
Pressure From Within
With over a million downloads of child exploitation videos, all facilitated with Bitcoin, one could easily argue that Bitcoin is an enabler here. Each user received a unique Bitcoin address with which to transact in Bitcoin, and that made the whole platform possible.
However, the Bitcoin blockchain made it possible for law enforcement to trace the flow of funds on the blockchain. Chainalysis, a well-known research company in the blockchain space, also participated in the analysis and verification of the transactions in this case. This means they were able to trace the flow of funds to and from the Welcome to Video main Bitcoin address.
Chainalysis believes in a future where the economy runs on cryptocurrency, but for this to happen self-policing within the sector needs to occur. This website was the first to use Bitcoin to monetize child exploitation videos, and by making an example of these companies, hopefully the reputation of the whole sector can remain intact.
Transparency A Priority
For those keeping track, this essentially makes Bitcoin worse for criminals rather than better. Cold hard cash can’t be traced from person-to-person, whereas Bitcoin’s immutable and transparent ledger provides definitive proof of who has been sending or receiving funds from a certain address.
It is often forgotten that one of the key aspects of cryptocurrency is the transparency most of the blockchains enable. Transparency is one of the most important parts of democracy because it allows for citizens to see what is going on in real-time and make decisions based on that information. So rather than being perceived as a force for evil, Bitcoin should be seen as something that enables a more democratic future for the world.
This applies doubly as more business (and societal functions) are brought online. For example, it was recently announced that Ernst and Young would be unveiling a blockchain technology platform that helps governments improve the accountability aspects of their spending. This will provide concrete ways of understanding how certain governments are performing, which will allow voters and other stakeholders to grasp complex situations better.
With Bitcoin recently experiencing a ton of volatility due to Chinese trade wars and Brexit, it is important to remember that it factors into power structures as well as economic situations.