Blockchain intelligence firm Elliptic and the Internet Watch Foundation (IWF) have launched a partnership to clamp down on the use of bitcoin in purchasing child porn.
London-based Elliptic, which identifies illicit activity on the bitcoin blockchain, will integrate the IWF's database of addresses with child sexual abuse content into its transaction monitoring and investigations.
It will then alert financial institutions and law enforcement agencies to any proceeds involving illicit content.
Elliptic works with the major US and European bitcoin exchanges, using technology that gets behind the anonymity associated with the bitcoin blockchain and has given the cryptocurrency a reputation for being a safe haven for criminal activity. In March, it raised £3.5m in Series A funding to crack down on bitcoin crime.
Elliptic chief executive and co-founder Dr James Smith said: "We have a profound respect for the critical and difficult work that IWF undertakes.
"We are proud to take a leadership role in combating bitcoin's use to facilitate these terrible crimes. In a world first, Elliptic's clients can now automatically monitor all transactions for any connections to proceeds of child sex abuse."
In 2015 the Cambridgeshire-base IWF identified more than 68,000 URLS containing child sexual abuse images, while Unicef Malaysia estimate two million children worldwide are affected by child exploitation each year.
The use of bitcoin in paedophile crimes was brought back into the spotlight earlier this year when Briton Richard Huckle, an English teacher and photographer, was given 22 life sentences after admitting 71 charges of child sexual abuse, almost all in Malaysia.
Huckle sought to profit from the abuse by posting footage of his attacks on the Dark Web in return for bitcoins.
Mark Birch, former detective chief superintendent and national regional organised crime unit lead for intelligence, said:
Elliptic and IWF’s partnership represents a major step forward in bitcoin’s evolution. Elliptic has demonstrated to banks, law enforcement and the public at large that they are taking meaningful steps to eliminate the illicit use of bitcoin.
They have set an important precedent for bitcoin companies worldwide to fight crime.
Yesterday, the European Commission proposed a strict set of rules that would end anonymous bitcoin and cryptocurrency transactions in a bid to crack down on terrorist financing.