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An investigative report has been published concerning the popular cryptic exchange ShapeShift AG, a company registered in Switzerland.
Money laundering is the problem at hand and the report highlights a potentially troubling theme: that ShapeShift allows anonymous users to convert Bitcoins, which authorities can not trace in other digital currencies that allow much more anonymity.
Wall Street Journal Survey
The investigation, conducted by The Wall Street newspaper, has identified in particular about $ 9 million in proceeds of suspected crimes that have passed through ShapeShift in the last two years.
Overall, most global exchanges operate outside the US jurisdiction, but not in ShapeShift. The company is officially registered in a free way Switzerlandbut, as noted, its offices are in Colorado. ShapeShift's founder and chief executive, Erik Voorhees, along with his chief operating officer and marketing manager, also live in the Denver area.
As stated by WSJ, a parade of alleged criminals took advantage of ShapeShift's services since the stock market opened in 2014. Newspaper demands are further strengthened by ordering officers and independent researchers.
Consider the last year I want to cry Ransomware attacks, where hackers thought they were from North Korea extorted millions of dollars, then they used ShapeShift to convert Bitcoin into Monero's "privacy currency", they discovered security researchers.
Many cryptocurrency exchanges claim to follow federal rules aimed at combating money laundering. To do this, they track their customers' identities and monitor transactions in an attempt to eradicate suspicious activity. shapeshift of Voorhees, on the other hand, has long mocked these constraints:
"I do not think people have to register their identity to capture an occasional criminal," he said in an interview in May.
Scope of money laundering, illogical comparison
To investigate the extent of money laundering related cryptocurrency, The Journal implemented computer programs that monitored funds from over 2,500 suspected frauds, hackers, blackmail schemes, and other alleged crimes focused on digital currencies. The Journal analysis – which included only a narrow slice of suspected criminal behavior involving cryptocurrencies – identified $ 88.6 million recycled through 46 exchanges.
Many presumed authors are unknown or fleeing. Some have been arrested and a small part of the money – less than $ 2 million taken from The Journal – has apparently been seized by order forces, although documents filed by the court do not report specific amounts.
Note that The Journal has found that ShapeShift has processed nearly $ 9 million of suspicious funds, more than any other exchange with US offices.
In response to the results, The Journal provided ShapeShift with a list of the suspicious addresses it used for the exchange. The company's legal representative, Veronica McGregor, stated that ShapeShift revised these addresses and banned them from using the exchange.
As reported at the beginning of this month by NewsBTCMcGregor also said that ShapeShift plans to start requiring users to provide identification from October 1st. He said the company is doing this to "de-clear up" in the face of potential new regulations and abuse by criminals ", not in response to any reinforcement action regulation."
McGregor said he wants to separate Voorhees's opinions from those of the company:
"Just because it's the CEO's personal philosophy does not mean that this is how the business will be managed," he said. "He is not in favor of money laundering".
However, as one of the main components of the report, WSJ compared the $ 2.7 billion a day that banks have recycled over the past decade and $ 9 million allegedly recycled through ShapeShift. That is, a discrepancy of $ 1.97 billion, which means that the banks have recycled $ 1.97 billion more in the 24-month space than the encrypted exchange.
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