Cryptocurrency Exchange

WSJ: $88.6 Million in Illegal Funds Directed Through Cryptocurrency Exchanges

In a recent news story flaunted by Wall Street Journal, it has investigated that $88.6 million in ill-gotten funds have been directed through 46 cryptocurrency exchanges as reported by the WSJ on 28th September. With this, $9 million of the distrust funds supposedly went through crypto exchange ShapeShift.

A Switzerland based digital currency exchange, ShapeShift was formed in 2014 by Erik Voorhees. Dissimilar of other trading platforms, ShapeShift let users to unknowingly trade Bitcoin (BTC) that police can access but can not identify the individual behind the entire transaction.

Amid this, in order conduct further investigation of crypto money laundering, WSJ is expected to have created a computer program that helped track funds of more than 2,500 suspected investment frauds, blackmail schemes and other alleged crimes that actively used BTC and Ethereum (ETH). Further to analyze ShapeShift transactions, WSJ gathered the details by downloading and storing a list of the 50 latest transactions happening every 15 seconds at the exchange’s website.

According to WSJ, bad actors took benefits of ShapeShift’s services to transform BTC into an untraceable cryptocurrency – Monero. Besides this, ShapeShift has already continued process in place with “millions” of fraudulently obtained dollars, however, it did not change its policy pertaining to users anonymity. With this, Voorhees (in an interview with WSJ) said that “he does not think that people should have their identity recorded to catch an occasional criminal.”

Additionally, WSJ consequently provided ShapeShift with a list of distrustful addresses, which were supposedly using the exchange. Amid this, Veronica McGregor, the chief legal officer at ShapeShift, told WSJ that “the exchange reviewed and banned those addresses, and the company plans to require user identification data starting Oct. 1.”

Further commenting on Voorhees’s views pertaining to the company’s anonymity policy, McGregor said in a statement that “just because it’s the personal philosophy of the CEO doesn’t mean that’s how the business is going to be run. He’s not pro-money-laundering.”


Although users have not been previously compelled to sign in or get registered on ShapeShift in order to execute trades, the exchange is expected to introduce ID requirements for traders in the days to come. At the beginning of this month, ShapeShift launched a new rewards program, which will ultimately become an essential membership model for the exchange’s users and require the further provision of “basic” personal information.

Shalin Soni

Shalin joined CryptoNewsZ as Associate Finance (Cryptocurrency Research & Analysis) in 2018 and has 10 years of collective experience to work on financial modeling and financial planning & analysis activities (fp&a) domains. He has worked with various organizations in India and added values by leveraging his skills and expertise. He has strong domain expertise in research & analysis, valuation, and fp&a!! You can also mail him at [email protected] to discuss anything related to his reports.

Leave a Reply

Your email address will not be published. Required fields are marked *

Event Information
Event Information
Back to top button