ShapeShift CEO hits back at WSJ ‘dirty money’ claim

October 02, 2018
Chris Wheal

Cryptocurrency exchange ShapeShift has strongly condemned recent claims from the Wall Street Journal that $9m in “dirty money” went through the exchange.

Last week, the WSJ ran a story headlined “How dirty money disappears into the black hole of Cryptocurrency”. The paper alleged that more than $88m in fraudulently obtained funds had been funnelled through 46 cryptocurrencies with $9m laundered through ShapeShift.

In response, a blog post by ShapeShift’s chief executive Erik Voorhees confirmed that the exchange team had worked with WSJ journalists for five months, but “under false pretences” and he insisted that information provided by the exchange was misrepresented or omitted.

In its article, WSJ states that certain parties took advantage of ShapeShift’s user anonymity, converting Bitcoin into the supposedly untraceable crypto Monero.

The ShapeShift team had worked with WSJ journalists for five months

However, Vorhees countered the accusations, arguing that the exchange had an internal anti-money laundering programme that deployed advanced blockchain forensics far superior than merely asking for names and addresses.

Vorhees went on to claim that WSJ “forewent a chance to prevent potential illicit activity” in the way they chose to report.

He argued that WSJ withheld gathered data on suspicious accounts “in order to build their story”. In doing this, the paper, according to Vorhees, failed to report suspicious activity to the appropriate exchanges, including ShapeShift, so they could immediately block the accounts.

Vorhees’ post said: “We are trying to pioneer a new financial system, and we don’t expect to be loved by the proponents of the old.”

He added: “We will push forward, and we’d suggest the WSJ change their title to be more accurate and objective, ‘Less than two tenths of one percent of ShapeShift’s business might be illicit’.”

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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