Cryptocurrency

Spike

In recent months, a troubling trend has emerged in the world of crypto crime.
According to the latest Chainalysis report shared with CryptoPotato, there has been a significant increase in China-based vendors involved in distributing child sexual abuse material (CSAM). The report sheds light on a sharp rise in CSAM networks operating from China and the sophisticated ways these vendors utilize crypto to facilitate their heinous activities.
<h2 id="crypto-crime-spike">Crypto Crime Spike</h2>
Chainalysis revealed a notable surge in on-chain activity associated with China-based CSAM vendors. Since late 2023, there has been an increase in the proportion of global CSAM inflows denominated in yuan, with China-based vendors capturing up to 38.8% of total CSAM inflows in Q1 2024.
<figure id="attachment_356827" aria-describedby="caption-attachment-356827" style="width: 100%" class="wp-caption aligncenter"><a href="https://cryptopotato.com/wp-content/uploads/2024/08/111-1.jpg" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img class="size-full wp-image-356827" src="https://cryptopotato.com/wp-content/uploads/2024/08/111-1.jpg" alt="Inflows to China-based CSAM" width="875" height="381" srcset="https://cryptopotato.com/wp-content/uploads/2024/08/111-1.jpg 875w, https://cryptopotato.com/wp-content/uploads/2024/08/111-1-300x131.jpg 300w, https://cryptopotato.com/wp-content/uploads/2024/08/111-1-768x334.jpg 768w, https://cryptopotato.com/wp-content/uploads/2024/08/111-1-50x22.jpg 50w" sizes="(max-width: 875px) 100vw, 875px"></a>
 <figcaption id="caption-attachment-356827" class="wp-caption-text">
 Inflows to China-based CSAM
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</figure>
One of the most alarming aspects of this trend is the use of crypto to facilitate these transactions. The report provided a detailed on-chain analysis of payments received by CSAM vendors, illustrating how these operators leverage crypto assets for financial transactions. Buyers can purchase access to CSAM material for as little as $5 for a single day or around $41 for nearly permanent access.
The rise of these vendors coincides with the emergence of new on-chain infrastructure. The report notes that many of these China-based wallets are relatively recent, with some dating back to mid-2023. This suggests that these networks are not just exploiting existing systems but are actively expanding and developing new mechanisms to evade detection.
<figure id="attachment_356828" aria-describedby="caption-attachment-356828" style="width: 100%" class="wp-caption aligncenter"><a href="https://cryptopotato.com/wp-content/uploads/2024/08/222.jpg" data-wpel-link="internal" rel="noopener noreferrer nofollow"><img class="size-full wp-image-356828" src="https://cryptopotato.com/wp-content/uploads/2024/08/222.jpg" alt="CSAM Subscription Rates" width="728" height="697" srcset="https://cryptopotato.com/wp-content/uploads/2024/08/222.jpg 728w, https://cryptopotato.com/wp-content/uploads/2024/08/222-300x287.jpg 300w, https://cryptopotato.com/wp-content/uploads/2024/08/222-50x48.jpg 50w" sizes="(max-width: 728px) 100vw, 728px"></a>
 <figcaption id="caption-attachment-356828" class="wp-caption-text">
 CSAM Subscription Rates
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</figure>
CSAM vendors have been found to leverage instant exchangers when cashing out. According to Chainalysis, instant exchangers <a href="https://www.chainalysis.com/blog/cryptocurrency-exchange-types/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="external">represent</a> a form of non-custodial platform, but they are much more user-friendly compared to their decentralized counterparts. These platforms often support a wider variety than retail exchanges and convert funds immediately.
<h2 id="huione-guarantee-a-major-hub-for-cybercrime-and-fraud">Huione Guarantee: A Major Hub for Cybercrime and Fraud</h2>
Chainalysis has also witnessed a rise in the use of&nbsp;Chinese-language marketplaces and laundering networks, including Huione Guarantee, an online marketplace tied to the Cambodian conglomerate Huione Group. As previously&nbsp;<a href="https://cryptopotato.com/elliptic-links-huione-guarantee-to-global-money-laundering-and-cyber-scam/" target="_blank" rel="noopener noreferrer nofollow" data-wpel-link="internal">reported,</a> Huione has been exposed as a significant player in facilitating cybercrimes,&nbsp;including CSAM distribution and pig butchering scams.
Processing over $49 billion in crypto transactions since 2021, this platform operates as a peer-to-peer platform connecting buyers and sellers without verifying the legitimacy of listed goods. This service has been used extensively by various criminal networks, including those behind high-grossing scams and illicit activities.
The post <a href="https://cryptopotato.com/chainalysis-unveils-alarming-growth-of-china-based-csam-networks-utilizing-cryptocurrency/" rel="noopener noreferrer nofollow">Chainalysis Unveils Alarming Growth of China-Based CSAM Networks Utilizing Cryptocurrency</a> appeared first on <a href="https://cryptopotato.com/" rel="noopener noreferrer nofollow">CryptoPotato</a>.

Chainalysis Unveils Alarming Growth of China-Based CSAM Networks Utilizing Cryptocurrency

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