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Last spring, European law enforcement agencies took down Kidflix, a major platform for crypto-based sales of child sexual abuse material (CSAM). Although the credit for the shutdown and subsequent arrests should all go to international law enforcement agency Europol, law enforcement agencies in Germany and the Netherlands, as well as the other law enforcement agencies that assisted in this investigation, one cannot minimize Binance’s important role in the
Kidflix case.
Binance Global Head of FIU Niels Andersen-Röed recently commented on Binance’s role in the Kidflix case in a LinkedIn post, “Binance’s commitment to collaborative security and its use of advanced blockchain analytics demonstrate the potential of cryptocurrency to be a powerful tool in fighting crime and protecting vulnerable communities, as seen in their contribution to Operation Stream, one of Europol’s largest operations against child sexual exploitation and abuse.”
Binance’s participation in this investigation, which we will go into in fuller detail below, could prove to serve as a precedent for the power of large cryptocurrency companies like Binance to help law enforcement combat criminal activity beyond fraud and theft.
 
How Binance Helped European Law Enforcement Take Down Kidflix
The dark side of crypto’s pseudonymous nature is that, while it can keep lawful transactions more private, it also obscures and hides illicit activity from law enforcement.
At first, that’s what happened with Kidflix, for many years following its founding in 2021. With the platform utilizing crypto as a means of payment for CSAM, law enforcement faced difficulties identifying and unmasking the operators and users of this abominable platform.
However, while the depraved Kidflix community believed that crypto could keep them immune from prosecution, they were seriously mistaken. Blockchain technology may have made it easier to stay illicit activity in the dark. Still, conversely, it has also made it far easier for crypto companies to bring such activity out of the dark.
In short, pseudonymity is not anonymity. This proved key for the Kidflix investigation, which was officially known as “Operation Stream.” For “Operation Stream,” Law enforcement, with the help of Binance’s investigations team, was able to “follow the money,” using blockchain analytics tools like Chainalysis, TRM, and Elliptic to deanonymize the flow of payments between users and operators of the Kidflix platform.
The Biggest CSAM Bust in Europol History
Through their blockchain analytics efforts, Binance’s investigations team was able to determine that 120 Kidflix users were also users of their cryptocurrency platform. Given the company’s compliance with “know your customer” (KYC) regulations, Binance was able to provide law enforcement with not just the legal names of the account holders, but information such as addresses and nationality as well.
Hence, what was previously pseudonymous became fully deanonymized. This data proved invaluable to Europol and the other law enforcement agencies involved in “Operation Stream.”
Thanks to this information, Europol was able to determine that most of the suspects were repeat offenders already on their radar. From there, the agency was able to pull off what was the biggest CSAM takedown in Europol history.
79 suspects were arrested, servers and other equipment used to store over 72,000 videos were seized, and another 1,400 active users of the platform were identified.
Many Takeaways From This Public-Private Partnership
From this successful partnership between law enforcement agencies and a major name in the cryptocurrency space, there are multiple takeaways to be had. For one, Binance’s considerable assistance in this case demonstrates how cryptocurrency companies can not only help mitigate financial-based cybercrime, but also help to tackle more violent and depraved criminal activity.
This could pave the way for companies like Binance to play an important role in combating other types of serious non-financial crime, such as terrorism, human trafficking, and illicit drug distribution. Binance appears ready to tackle similar cases. As the company itself has noted, Binance is “dedicated to unmasking criminal activities and protecting vulnerable communities.”
“Operation Stream” also helps to deconstruct the notion that cryptocurrency platforms help criminals stay one step ahead of the law. As global head of special investigations at Binance, Erin Fracolli put it, when discussing the pseudonymous nature of modern-day cryptocurrency trading platforms, if you are engaged in illicit activity, “you can get caught.”
Source: https://zycrypto.com/binance-assisted-regulators-in-shutting-down-child-exploitation-platform/