ShapeShift is a firm that provides global trading of a variety of digital assets. Recently, a report from the Wall Street Journal claimed that ShapeShift was one of the largest recipients of illicit funds. ShapeShift reacted sharply on the allegation.
ShapeShift posted an official blog, stating that the article largely contains factual inaccuracies and has excluded major details about how ShapeShift operates. Further added that the piece indicates a misunderstanding of blockchain transaction operations.
According to a CCN report, WSJ article also alleged that ShapeShift has been processing $9 million out of the suspected $88 million over a two-year period. The title of the report was “How Dirty Money Disappears Into the Black Hole of Cryptocurrency”. The article also claims that it traced funds from more than 2,500 wallets that have faced accusations on courts for their involvement in criminal activities.
The article proclaimed, “A North Korean agent, a stolen-credit-card peddler and the mastermind of an $80 million Ponzi scheme had a common problem. They needed to launder their dirty money. They found a common solution in ShapeShift”.
On this scenario, ShapeShift has responded that it has been working with WSJ for five months, accommodating their queries, while the media giant has misinterpreted their intentions. Also, CEO of ShapeShift Erik Voorhees stated that “Of the many things I communicated with them over the past months, they included not a single statement from those lengthy discussions, preferring instead to include out-of-context remarks I’d made elsewhere.” He added, “there is inaccuracy and ambiguity in those facts presented by WSJ that alleged $70,000 was laundered by ShapeShift, while in reality $0 was laundered by ShapeShift”, blaming WSJ for not having sufficient understanding of blockchains and ShapeShift’s platform in particular
On that note, Voorhees, co-founder of the bitcoin company Coinapult and famous serial Bitcoin advocates, criticized WSJ journalists for omitting crucial information regarding ShapeShift, he added by saying, “The WSJ decided to exclude from their article; facts such as, $9m (even if it was true) is 0.15% of ShapeShift’s exchange volume during the described time period,”
According to Voorhees, there are few other facts regarding ShapeShift which were neglected. Some of them including, the inviolable record of obeying law-enforcement requests and providing assistance in no less than 30 investigations in various countries. Also, ShapeShift blacklists suspicious addresses upon learning of them. The firm includes an internal anti-money laundering program which uses quite advanced blockchain forensics.
The WSJ report indicates information from security researchers saying that criminals used ShapeShift to exchange bitcoin for monero, an anonymity-centric cryptocurrency. The report marked that ShapeShift didn’t modify its policy even after one year the WannaCry ransomware attack and that the exchange has kept laundering illicit funds that cannot be traced.
On this, Voorhees proclaimed that the journalists of WSJ have held back information for months regarding the doubtful accounts to create their story. He said, “rather than communicating it to the appropriate exchanges and ShapeShift immediately so that funds could be frozen or blocked”. He affirmed that each and every transaction done on ShapeShift is made public, it is traceable and that the exchange does not transact in fiat.
Voorhees finally concluded with confidence the company will suggest WSJ, a better title that is more apt “Less than two-tenths of one percent of ShapeShift’s business might be illicit.”
The CEO declared that ShapeShift has an industry-leading Anti-Money Laundering compliance firm inspecting all its transactions.