$9 Million Worth of Ill-Gotten Money Laundered Via Swiss Based Shape Shift

$9 Million Worth of Ill-Gotten Money Laundered Via Swiss Based Shape Shift

September 29, 2018 Off By Maheen Hernandez

An investigation initiated by the Wall Street Journal has to say that nearly $88.6 million worth of funds that have been gotten from illegal means has been funneled across 46 cryptocurrency exchanges. Out of which, nearly $9 million has passed through Shapeshift that provides with crypto exchange services.

ShapeShift is a cryptocurrency platform based in Swiss.  This platform is available in the web and on the mobile devices.  Transactions are fast and convenient in this website.  The customer funds are not collected into the company account.  There is no need to register the personal data of the user.  When an exchange fails, the company will keep all of the customer assets.  This platform operates only with cryptocurrencies.  There are only three types of transactions and they are “BTC to Altcoin, Altcoin to Bitcoin or Altcoin to Altcoin.”

Erik Voorhees founded Shapeshift in the year 2014.  While every crypto exchange would require the identity details of the individual, this exchange would permit users to trade Bitcoin in an anonymous manner.  The trade can be racked by the police; however, the identity cannot be uncovered.

An investigation of cryptocurrency money laundering was initiated by the Wall Street Journal.  The Wall Street Journal tracked illegal funds from investment frauds, blackmail scheme and other kinds of alleged schemes.  A computer program was used for this process.  More than 2,500 suspected investment funds were identified. Most of these schemes were using BTC and Ethereum.

To track down the Shapeshift transactions, the Wall Street Journal downloaded the transactions for every 15 seconds at the exchange’s website.  About 50 transactions were downloaded each time.

According to the Wall Street Journal, the money laundering aspirants have made use of the services offered by Shapeshift in order to convert BTC to Monero.  Monero is an untraceable cryptocurrency.  Several millions of such fraudulent monetary transactions were tracked down.  Despite this Shapeshift is not changing its policy about maintaining the anonymity of the users.

Voorhees has to say that “people should have their identity recorded to catch an occasional criminal.”

The list of suspicious addresses that were using the Shapeshift platform was handed over by WSJ to Shapeshift.  These addresses were allegedly making use of the services to launder up their money.  Veronica McGregor, the chief legal officer at ShapeShift, told WSJ “The exchange reviewed and banned those addresses. She also said that the company plans to require user identification data starting Oct. 1.”

Commenting on Voorhees’s views regarding the company’s anonymity policy, McGregor stated that “just because it’s the personal philosophy of the CEO doesn’t mean that’s how the business is going to be run.”  She also added that “He’s not pro-money-laundering.”

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