Paedophiles are turning to the anonymous transactions possible with digital currency bitcoin in order to buy child sexual abuse images online, according to the findings of a UK internet watchdog.
Some 37 websites selling child sex abuse images for bitcoins were reported to the Internet Watch Foundation (IWF) between January and April last year. In its annual report for 2014, the regulator said several of the "most prolific commercial" child sexual abuse websites started accepting the currency as a payment for images last year.
The virtual currency is growing in popularity and is now accepted by a wide range of retailers, but transactions in the currency are encrypted and hard to trace and there have been numerous reports of it being used for illegal activities by organised criminals, hackers and paedophiles hoping to mask their identity.
The IWF said it was working with several of the world's largest bitcoin exchanges to share intelligence and develop strategies for preventing the currency being abused by distributors of child sexual abuse images.
Emma Hardy, the IWF's director of external relations, said: "One area we look at in particular is the commerciality of child sexual abuse images and videos – people who want to buy and sell this type of content online.
"We noticed for the first time ever last year that cryptocurrency or bitcoin was being used. We need to ensure we engage with those who run bitcoin services, but also other ordinary payment mechanisms, financial providers, to ensure we can help prevent them being abused by criminals."
The virtual currency allows users to pay for goods and services from their computer or mobile device independent of any bank or central authority and it has its own intrinsic value, as it is not tied to any physical currency.
Users can generate bitcoins by signing up and creating an online wallet for themselves and then carry out transactions directly with others who use the service.
Mirroring the growth in the use of bitcoin, the IWF’s annual report found that the total number of web pages featuring images of child sexual abuse had also soared last year by 137 per cent – the regulator removed 31,266 URLs hosting pictures and videos of children being sexually abused in 2014, compared with 13,182 in 2013.
The IWF was launched in 1996 and is funded by 117 companies and organisations including technology giants Apple, Google, Facebook and Twitter. It was given specific new powers to seek out criminal content online in the wake of the murders of Tia Sharp and April Jones, who were both murdered by men who had previously viewed child sexual abuse images on the internet.
An increase in funding last year saw the watchdog recruit another eight internet content analysts to root out child abuse imagery online, taking their total to 12.
Hardy said: "The biggest change for us last year was our ability to proactively search for child sexual abuse imagery. Our analysts are able to actively search for the content, rather than merely wait for reports to come in from the public.
"That's made a huge difference. Last year we were able to process 74,000 reports and within that we were able to identify just over 31,000 child sexual abuse web pages. I think there's still a huge amount out there. We've got a long way to go until we see the peak of this problem."
The IWF found many legitimate online services were being abused by criminals distributing child sexual abuse imagery, in particular image hosting services, where users can upload images and make them available via a unique URL, and cyber-lockers - online file hosting and storage services.
The number of image-hosting URLs removed rose from 5,594 in 2013 to 19,710 in 2014 while 5,582 cyber-locker URLs were removed because they were hosting child sex abuse images in 2014 compared with 1,400 in 2013.
The IWF said it alerts law enforcement agencies and hotlines in other countries when it discovers foreign-based web pages with child sexual abuse images and "repeatedly chases" them until they are removed.
IWF chief executive Susie Hargreaves said that while the online industry was "stepping up" efforts to tackle child sexual abuse images, many companies either did not recognise they had a problem or were too slow to respond.
"It is not good enough for those companies to allow the burden of responsibility to fall on a socially responsible few," she said. "This year will ensure they have nowhere to hide as we will be targeting them for the benefit of all internet users and victims of sexual abuse."