Crypto Tracing Busts Global Child Abuse Network

A joint operation by authorities in the United States, Germany, and Brazil relied on cryptocurrency tracing to identify a Peruvian national who allegedly operated dark web platforms Videos Yad and Videos Sebick. According to a TRM Labs report, the suspect used mixers, multiple wallets, and third-party accounts to hide payments, but blockchain analysis revealed shared infrastructure linking the old and new platforms. Brazilian Federal Police arrested the Peruvian national in September after a TRM Labs-led crypto-tracing operation, finding child sexual abuse material during the search.

The scale of the operation was staggering: the seized platforms had over 350,000 users worldwide, offering 21,000 illicit videos totaling approximately 660 hours of content with nearly 900,000 views. Memberships started at just $10, making the material widely accessible. The platforms were hosted on German servers that authorities later shut down and replaced with official seizure notices from the Bavarian State Criminal Police Office.

Investigators working with Brazilian police traced payments from customers through intermediaries to final cash-outs at Brazilian crypto exchanges. This digital paper trail proved decisive after the network had operated undetected for years. “By following the money, investigators were able to connect fragmented digital identities,” TRM Labs’ Ari Redbord told Decrypt, highlighting how blockchain intelligence exposed a transnational criminal network that had evaded detection through traditional means.

The case demonstrates how blockchain analytics firms like TRM Labs are playing an increasingly critical role in law enforcement operations against digital crime. Despite the suspect’s sophisticated attempts to conceal his activities using fake identities and cryptocurrency obfuscation techniques, TRM Labs’ analysis found the shared blockchain infrastructure that connected the various platforms. This technical breakthrough allowed investigators to pierce the veil of anonymity that dark web operators typically rely on.

“The necessity of this on-chain information to unmask the alleged administrator underscores the investigative value of TRM’s database of financial intelligence related to CSAM,” the TRM Labs report noted. Ari Redbord, VP and Global Head of Policy and Government Affairs at TRM Labs, emphasized to Decrypt that “This case demonstrates how blockchain intelligence can play a decisive role in protecting the most vulnerable” by connecting digital identities that would otherwise remain fragmented across the dark web.

The success of this operation highlights a growing capability among blockchain intelligence firms to track cryptocurrency flows even through mixing services and multiple wallet hops. This technical advancement represents a significant challenge to criminals who have traditionally relied on cryptocurrency’s perceived anonymity to conduct illicit activities across international borders without detection.

This operation marks part of a growing global push to hold cryptocurrency intermediaries accountable for enabling illicit finance, from child exploitation to ransomware. Authorities and blockchain firms are stepping up joint efforts to dismantle crypto-enabled child exploitation networks, with recent actions showing increased coordination between public and private sectors.

In June, blockchain analytics firm Elliptic joined the Internet Watch Foundation to receive live alerts on crypto transactions linked to child abuse material. The IWF’s 2024 report showed cryptocurrency as the top payment method on such sites, appearing on 60.87% of URLs offering payment options. This statistic underscores the prevalence of digital currencies in facilitating these criminal operations and the urgent need for specialized tracking capabilities.

Recent enforcement actions demonstrate this global trend. Last month, Canada’s FINTRAC imposed a record $126 million fine on Cryptomus for failing to report thousands of suspicious transactions linked to child exploitation, ransomware, and sanctions evasion. Meanwhile, Europol recently seized $330,000 in cryptocurrency and arrested seven people tied to a Latvian cybercrime network that used 1,200 SIM box devices for crimes, including distributing child abuse material.

“Public-private collaboration remains vital in combating online child exploitation,” Redbord said. “These cases cross borders, platforms, and currencies—and it’s only through partnerships like this one that we can deliver meaningful impact.” This sentiment reflects a growing recognition that combating sophisticated digital crime requires coordinated efforts across jurisdictions and between government agencies and private sector experts in blockchain technology.