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Korean exchanges cooperated with pornography ring

After it was found that a pornography ring operator on the Telegram instant messaging app received cryptocurrency as a fee for granting access to videos of dozens of enslaved women, including children, the police are working to verify the list of users by sending requests to local cryptocurrency exchanges. Cryptocurrencies used in the scheme were Bitcoin, Ethereum and Monero. #Request for cooperation sent to four domestic exchanges On March 24, local currency exchanges said they received requests from the police for an investigation into the pornography ring case and started their own efforts to verify those involved. The exchanges that received the request are Upbit, Bithumb, Coinone and Korbit. According a Bithumb spokesperson, the exchange is actively cooperating with the police investigation, but it said it is unlikely that its participation will be significant as it is expected that those involved in the alleged crime are assumed to have bought cryptocurrency from small and medium-sized exchanges. For Bitcoin and Ethereum, it is possible to trace who sent it, when it was sent and where it was sent by using historical records. According to an industry source, the police asked exchanges to trace back the cryptocurrency wallets of “Baksa,” the suspected leader. Around 100 of the users were found to have utilized Monero to pay the entrance fees. Monero is different from other cryptocurrencies in that it has strengthened anonymity. For that reason, the pornography ring often requested Monero for entrance fees. At the moment, Bithumb and Huobi Korea are the two main cryptocurrency exchanges in Korea that trade Monero. Bithumb is cooperating with the police investigation, but Huboi Korea said it has not yet been contacted by the police. #An exchange that sold Monero raided Some users who are unfamiliar with buying cryptocurrency were found to have used a cryptocurrency brokerage. A main suspect for the case asked some users to use that brokerage in getting Monero and paying the entrance fees. With that information, police raided the brokerage last week, and said they acquired around 2,000 related transaction records. “People involved in the crime are likely to have left their real phone numbers to get the token, and they are more than likely to own videos containing illegal pornographic materials of the victims,” the police said. #Foreign exchanges and private wallets might be hard to trace It is also probable that some of those involved in the crime used many other foreign cryptocurrency exchanges or private wallets in making transactions. It is fairly simple to verify users at local cryptocurrency exchanges, but it could be hard to win cooperation from foreign exchanges. A blockchain tracing solution source said, “In the case of Bitcoin, there are solutions like dusting that can help the process of verifying related users, but if people used foreign exchanges or those highly knowledgeable of cryptocurrency used their private wallets to send Monero, it could be hard to trace them.”

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