ShapeShift CEO strikes back at WSJ, says they prevented victims of scams from recouping funds

Recently, the Wall Street Journal published an article about ShapeShift being used by criminals to carry out money laundering activities. The CEO of ShapeShift, Erik Vorhees, responded to the article, stating that it was riddled with “factual inaccuracies”.

He also stated that the report withheld information about suspicious wallet addresses, causing individuals to have difficulties in recouping their funds from these criminal wallets.

The report alleged that ShapeShift was being used to convert Bitcoin [BTC] into Monero [XMR] for money laundering, and that it continued to process “millions of dollars in criminal proceeds”. However, Vorhees confronted the numbers present in the article, stating:

“$9m (even if it was true) is 0.15% of ShapeShift’s exchange volume during the described time period.”

He further said that the WSJ chose to not include such information in their article, even after “lengthy discussions” for over 5 months as they collaborated over the article. Moreover, as the article’s main gripe with Vorhees was that the exchange did not implement KYC, he also made the point that ShapeShift has since implemented this procedure.

The CEO went on to say:

“The article singled-out ShapeShift and implied that the company is a bastion of illicit activity because it hadn’t previously required user information–despite that same data showing that other exchanges (which did take user information) had similar figures.”

He accused the news portal of “omit[ting] significant details about how ShapeShift operates”, calling it a “fundamental misunderstanding” of how the blockchain works. Vorhees also pointed out the existence of a “self-policing group”, which monitors suspicious transactions on the exchange.

ShapeShift works with other exchanges, has collaborated in over 30 investigations, and blocks countries on sanction lists, reiterated Vorhees. He also spoke about the internal, “industry leading AML” procedure that ShapeShift follows, stating that it utilizes blockchain forensics to identify suspicious transactions.

Reportedly, the Journal withheld information regarding the existence of suspicious transactions on the exchange, leading to a lack of information on ShapeShift’s side. Vorhees stated on this:

“It is likely victims of these thefts lost their chance to recoup some of the funds due to this opportunism.”

He also made the point that ShapeShift publishes all the transactions that go through the platform. He went on to say:

“Based on our own analysis of the transactions cited in the article, the WSJ erroneously attributed vast sums of allegedly illicit transactions to ShapeShift in a way that exhibits a profound failure to grasp how blockchains, in general, and our system in particular, really work.”

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