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THE DARK WEB: Fraud and Murder in the Digital Underground
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The United States Department of Justice
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Hundreds of people in nearly 40 countries — including upward of 50 Americans — were arrested for accessing child porn darknet site “Welcome to Video,” which ran on cryptocurrency.
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The world’s “largest” dark web child porn site, which boasted “more than a million” downloads, was shuttered after international authorities said they followed a seedy trail of Bitcoin transactions.
Jong Woo Son, 23, a South Korean national, was indicted by a federal grand jury in 2018 for running Welcome to Video, which authorities described as “the largest child sexual exploitation market by volume of content,” according to the Department of Justice. Son was sentenced to 18 months in prison in South Korea; however, the nine-count indictment against him was only unsealed on Wednesday.
The site, which had supposedly operated from at least June 2015 to 2018, had more than 200,000 unique videos, which totaled more than eight terabytes in size, according to an indictment obtained by Oxygen.com . Over the course of three years, authorities said the site received at least 420 Bitcoins through 7,300 transactions — the equivalent at the time of about $370,000.
“Darknet sites that profit from the sexual exploitation of children are among the most vile and reprehensible forms of criminal behavior,” Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division said in a statement to the press.
The darknet site’s reach supposedly spanned the globe. Three hundred and thirty seven people were arrested in 38 countries around the world, including the U.K., South Korea, Canada, the Czech Republic, Germany, Saudi Arabia, Ireland, Spain, Brazil, and others. A total of 23 children, who were “being actively abused” by site users, were also rescued in the U.S., the U.K., and Spain in the course of the investigation, officials said.
Fifty-three individuals in the U.S. were charged in the sweeping investigation, two of whom died by suicide after authorities executed search warrants on their property.
U.S. federal employees, investigators said, were also implicated in the dark web child porn investigation, according to the indictment. Former ICE special agent Richard Nikolai Gratkowski and border patrol agent Paul Casey Whipple, both of Texas, were arrested on child porn charges in connection to Welcome to Video. Gratkowski, 40, who pleaded guilty to intent to access child porn, was sentenced to 70 months in prison and ordered to pay $35,000 in restitution to seven victims. Whipple was also charged with production and distribution of child porn. The 35-year-old is in custody while his case is pending.
Son was arrested by Korean, American, and British authorities in South Korea on March 5, 2018. The 23-year-old had previously been identified after law enforcement discovered Welcome to Video hadn’t concealed its server’s IP address, which they later learned was registered in his name. Authorities seized Son’s server, which contained hundreds of thousands of child porn videos. The National Center for Missing and Exploited Children is now combing through the mountain of content.
The site, described by officials as being “among the first of its kind to monetize” child porn using Bitcoin, was driven — and funded — by cryptocurrency. Some of the accounts which supposedly funneled money into the site had reportedly also laundered funds to other darknet sites, including Agora, AlphaBay, and the shadowy narcotics portal Silk Road.
“Sadly, advances in technology have enabled child predators to hide behind the dark web and cryptocurrency to further their criminal activity,” said Alysa Erichs, acting executive associate director for Homeland Security Investigations, in the Department of Justice press statement.
Investigators traced Bitcoin payments to the dark web site using cryptographic metadata — or a blockchain — which contains records, time stamps, and cryptocurrency transactional data. A six-month VIP subscription on the site, which gave users unlimited access to child porn videos, reportedly cost 0.03 Bitcoins — about $350.
“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 Don Fort, the IRS Criminal Investigation chief.
Before it was taken down by authorities, the site’s welcome page specifically warned users: “Do not upload adult porn.”
An undercover federal agent had previously used Bitcoin on multiple occasions to access Welcome To Video's content, as well. In one instance, the investigator observed a man perform sexual acts on a 6-month-old child, according to the indictment against the dark web platform. That particular video, officials said, was downloaded 113 times. Another video, which showed a man urinating on a 10-year-old girl, had been downloaded 219 times.
In 2014, the National Center for Missing and Exploited Children received 1.1 million reports regarding child pornography incidents. But in a matter of years, that figure has skyrocketed to more than 18 million in 2018.
The rise of cryptocurrency and the dark web has created an anonymous, burgeoning, and borderless criminal marketplace, which governments around the world have at times struggled to tamp down on.
“It has been popular among criminals in certain circles on the darknet,” Eric Wall, a Swedish-based Bitcoin researcher, told Oxygen.com .
“Some have transitioned to more private cryptocurrencies, but Bitcoin sometimes still persists as an option. Cryptocurrencies are not only popular because it provides you with privacy of how much you own or what you use it for, but also because it's impossible to take from you when you use it right. It's a very powerful thing.”
Wall, a former blockchain lead at Nasdaq-owned fintech firm Cinnober, noted that cryptocurrency crime has actually dipped in recent years, particularly since the darknet drug platform Silk Road was first brought down by the FBI in 2013.
Today, he said, “less than 1 percent of Bitcoin transactions can be traced to darknet activities.”
Wall explained that certain governments like Ecuador and Pakistan have banned cryptocurrencies or their trading. However, the 28-year-old researcher was adamant cryptocurrency wasn’t the problem, at least in the case of Welcome to Video.
“We sadly have no way of excluding child pornographers from using such technologies for their own purposes, in the same way we cannot exclude them from buying and using cameras, the internet, or encryption,” he explained.
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