Anonymous Payments, Pornography, and Human Trafficking

Eight years ago, a collaboration began between the International Center for Missing and Exploited Children (ICMEC), major banks, credit card companies, Internet service providers, payment processors, and Internet companies like Google and Microsoft. They had hoped to follow the money and quash child pornography for good.

But at some point the money trail went cold. For the last year, ICMEC head Ernie Allen has been working with global law enforcement and financial leaders to find out why. He may be getting closer to an answer. Cybersecurity experts say billions of dollars made from child pornography and illicit sales of things like national secrets and drugs are being moved through anonymous Internet payment systems like Liberty Reserve, the currency exchange whose operators were indicted for laundering $6 billion.

“What we have concluded is that illegal enterprises — commercial child pornography, human trafficking, drug trafficking, weapons trafficking and organized crime — has largely moved to an unregulated system that is not connected to any central bank or national authority,” Mr. Allen said. “The key to all of this has been anonymity.”

Liberty Reserve was shut down last weekend, but cybersecurity experts said it was just one among hundreds of anonymous Internet payment systems. They said online systems like the Moscow-based WebMoney, Perfect Money, based in Panama, and CashU, which serves the Middle East and North Africa, require little more than a valid e-mail address to initiate an account. The names and locations of the actual users are unknown and can be easily fabricated. And they worry that the no-questions-asked verification system has created a safe harbor for illicit activity.

“With anonymous payment systems, tracking has become virtually impossible,” Ernie Allen said. “How do you prevent these kinds of problems when you are dealing with an unregulated currency, monitored by nobody? The answer, I think, is there has to be some kind of structure.”

Learn more at Nicole Perlroth’s New York Times article: Anonymous Payment Schemes Thriving on Web.

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