A new report has uncovered nearly $100m of funds being laundered via cryptocurrency…
by Manoj Sharma for CNR
At the end of last week, the Wall Street Journal published a thoroughly-investigated report of illicit funds close to $100 million being funnelled through cryptocurrencies via crypto exchanges.
The article details that at least 46 exchanges were involved in the laundering of $88.6 million. However; most of the stolen funds were reportedly sent via Shapeshift, a multi-coin exchange that until recently has prided itself on its no-registration required mechanic. While backing up the claim, the WSJ details the experience of a credit card thief, a North Korean agent and the benefactor of a widespread Ponzi scheme.
Shapeshift, founded in 2014 by Erik Voorhees, a famous crypto proponent, offers the anonymity prized in digital assets that are not commonly found via other exchanges trusting strenuous identification processes. According to Cointelegraph, Shapeshift transactions are traceable despite being anonymous. But the privacy of individuals trading is kept hidden, thus providing a secure means for laundering money.
Shapeshift itself, incidentally, is absolutely not been accused of money laundering itself.
That accepted, the Wall Street Journal targeted Shapeshift as the likely source for cryptocurrency money laundering and designed a program as a part of its investigation process, which tracked funds from more than 2,500 illicit schemes, outright theft, and frauds. The WSJ downloaded Shapeshift’s published record of the most recent trades into a list every 15 seconds to keep an adequate record.
As per the report, money launderers utilised Shapeshift’s platform to convert Bitcoin into Monero, an anonymous and untraceable cryptocurrency.
While the article published by the WSJ implies that, on some level, Shapeshift was aware of money laundering of millions of dollars, the company refused to alter policies that would stop such transactions.
Recently, though, ShapeShift announced that it would oblige with KYC standards from today to “de-risk” itself. It is unclear if this is directly related to the WSJ investigation.