For two-and-a-half months, researchers working for Dutch group Terre des Hommes pretended to be the girl, while working undercover in a warehouse in Amsterdam.
‘Sweetie’, 10, was bombarded with offers of money in exchange for performing sex acts on webcam by over 20,000 individuals.
Researchers managed to identify 999 men and one woman involved. They included 254 from the US and 110 from Britain.
Project director Hans Guyt said:
'The moment we got online, we were swamped, like an avalanche.'
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‘If we don’t intervene soon, this sinister phenomenon will totally run out of control. The child predators doing this now feel that the law doesn’t apply to them.’
Guyt explained that webcam sex with minors is a relatively small industry, which can still be stopped.
‘Our worst scenario is that the same thing will happen with this as has happened with child pornography - that is now a multi-billion dollar industry in the hands of criminal gangs,’ he said.
One chat between the researcher identifying himself as Sweetie and one of the online users started with Sweetie asking: 'What you want see?'
The user responded: 'U.'
Sweetie replied: 'What u pay for?'
And the user added: 'Naked.'
The user offered to pay a $20 fee by a wire transfer and Sweetie asked for the person's Skype address, but took the chat no further.
Details of the 1,000 people the team managed to identify were sent to Interpol.
However, police will only be able to prosecute the suspects if they gather their own evidence.
Mr Guyt said: ‘The biggest problem is that the police don’t take action until child victims file reports but children almost never report these crimes.’