A Wall Street Journal report recently alleged that blockchain firm ShapeShift was one of the largest recipients of illicit funds. Now the firm hits back on the criticism.
Posted on the company’s official blog, ShapeShift said that the overall article contains factual inaccuracies and has omitted significant details regarding how ShapeShift operates. The piece shows a misunderstanding of blockchain transaction operations, it added.
As CCN reported, the WSJ article titled “How Dirty Money Disappears Into the Black Hole of Cryptocurrency”, traced funds from more than 2,500 wallets that has faced accusations on courts for their involvement in criminal activities. The report alleged that ShapeShift has been processing $9 million out of the suspected $88 million over a two-year period.
“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,” the article stated.
To this, the firm has reverted back saying that ShapeShift has been working with WSJ for five months, accommodating their queries, while the media giant has misrepresented their intentions. Erik Voorhees, CEO ShapeShift said,
“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.”
Also, Voorhees, co-founder of the bitcoin company Coinapult and one of the top-recognized serial Bitcoin advocates, condemned that WSJ journalists have omitted key information that ShapeShift has shared. “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,” he said in the post.
Few other facts including ShapeShift’s strong record of complying with law-enforcement requests, offering assistance in more than 30 investigations in different countries; ShapeShift blacklisting suspicious addresses upon learning of them; the firm having an internal anti-money laundering program that uses more advanced blockchain forensics; were neglected, he added.
The WSJ report showed factual information from security researchers proving that criminals used ShapeShift to exchange bitcoin for monero, an anonymity-centric cryptocurrency. The journal mentioned that ShapeShift didn’t change its policy even one year after the WannaCry ransomware attack, and that the exchange has continued to launder illicit funds that cannot be traced.
That said, Voorhess clarified that the journalists of WSJ have withheld information for months regarding the suspicious accounts in order to build their story, “rather than communicating it to the appropriate exchanges and ShapeShift immediately so that funds could be frozen or blocked.” Also he confirmed that every single transaction performed on ShapeShift is made public, making it traceable and that the exchange does not transact in fiat.
Blaming WSJ for not having sufficient understanding of blockchains and ShapeShift’s platform in particular, the CEO stated that 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.
He finally confirmed that ShapeShift has an industry-leading Anti-Money Laundering compliance firm checking all its transactions.
With more confidence and facts, Voorhess concluded that the company will push forward in suggesting WSJ, a better title that is more appropriate, being, “Less than two tenths of one percent of ShapeShift’s business might be illicit.”
Featured image from Shutterstock.