Last week, the Wall Street Journal, put up an article accusing ShapeShift of being a money laundering exchange. The article also implies that criminals are benefiting from the exchange as well.
Investigative journalism is quite risky, especially if you are proven wrong. Nowadays it’s fairly common practice for companies to ignore articles, which implement them in scandals or crimes.
After all, who can blame them? The constant avalanche of accusations thrown by the mass media isn’t doing it any favors.
This time, the accused decided to fight back. ShapeShift’s CEO Erik Voorhees published a blog post yesterday, stating why the WSJ article is wrong on many fronts. He dismissed the claims as “factually inaccurate and deceptive,” also stating that there was an obvious amount of misinformation. Voorhees also stated that the article had a strong misunderstanding on the general system of cryptocurrencies.
According to Voorhees, ShapeShift has cooperated with the WSJ for a while, but the last article showed very clear signs of insufficient understanding of blockchain and the platform in general. This is an interesting conclusion since the article came up with very detailed numbers about the “laundered money.”
The article states that following the investigation, the figures ended up at around $88 million. These $88 million were supposedly laundered throughout more than 45 different exchanges over the span of 2 years. ShapeShift was reportedly used as a funnel for around $9 of that amount. Over the listed exchanges, ShapeShift was “responsible” for the largest sum sent.
ShapeShift offers numbers, which fully support Voorhees’ words
Voorhees responded to these accusations by stating: “Even if the supposed $9 million DID get laundered through, this is only a fraction of the exchange’s total volume.” The scrawny 0.15% of the exchange’s total volume can hardly be taken as solid evidence. It’s important to note that ShapeShift has a very clean record in complying with law-enforcement. According to Voorhees, the exchange has cooperated in over 30 investigations in 13 different countries.
The most solid argument by the CEO of ShapeShift is that the exchange deals solely in crypto. This means the platform is non-custodial and everything is done crypto-to-crypto. There is no custody of user funds and assets are instead swapped at a set price. There is no use of dollars, euros or yens and not a single fiat currency has ever been laundered through ShapeShift.
Voorhees is open to the possibility that the misunderstanding was caused by misinformation. The way wallet addresses work, could have been too complex and lead the investigators to wrong conclusions. He also believes that today, ShapeShift is one of the most transparent exchanges available in the world. Every transaction done through the exchange is published online. This is done despite the strict user privacy protections, which the exchange has.
Maybe Voorhees is right that the WSJ took this information and jumped to conclusions without evidence. The full transparency, which ShapeShift provides makes for a solid rebuttal and maybe other exchanges should worry. If they cannot present the sufficient evidence in their defense, such an article can harm their reputation.
In the case of ShapeShift however, Voorhees proudly stated that:
“We are leading the world towards a new financial system. It’s not our intention to be loved by the old. This however, doesn’t mean that ShapeShift is above the law. On the contrary, we are always willing to cooperate with the laws of the jurisdiction we operate in. No matter how unclear, forever-changing, contradictory and in many cases completely useless and ineffective, these laws are.”
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