Crypto Markets

Shapeshift CEO Responds to Wall Street Journal Laundering Claims


Shapeshift CEO Responds to Wall Street Journal Laundering Claims

News

Reporters at the Wall Street Journal (WSJ) tied innovative ecosystem cryptocurrency exchange Shapeshift to money laundering. “How Dirty Money Disappears Into the Black Hole of Cryptocurrency,” was its published product from months of investigative journalism. The company’s CEO, Erik Voorhees, claims cooperation with the WSJ was obtained “under false pretenses.” He also charges the WSJ “omitted relevant information” among other gaffs. 

Also read: Ross Ulbricht Marks Fifth Anniversary in Prison

Shapeshift CEO Erik Voorhees Calls Wall Street Journal Article an “Attack”

Shapeshift CEO Erik Voorhees earned as much street credibility in the crypto space as anyone. His company has been around for nearly half of the nascent industry’s entire history. If there were a relative outsider/insider of cryptocurrency, an ambassador of sorts for the decentralized digital money revolution, it’s safe to write Mr. Voorhees would make many top ten lists, and Shapeshift is his most notable contribution alongside Bitinstant, Coinapult, and Satoshidice.  

Shapeshift CEO Responds to Wall Street Journal Laundering Claims

“Shining Light on WSJ’s Attack on Shapeshift and Crypto” is Mr. Voorhees attempt to set the record, as he sees it, straight. If legacy finance news organizations of record were to “attack,” they couldn’t really do better than he and Shapeshift. That aside, he and the exchange believe the WSJ produced a pure hit piece, gaining trust over “5 months” only to “omit relevant information,” overlooked the “chance to prevent potential illicit activity,” ultimately proving the reporters “do not have a sufficient understanding of blockchains and our platform in particular,” Mr. Voorhees insists.

It hasn’t exactly been a wonderful public relations month for the veteran firm. As these pages noted at the beginning of September, “Non-custodial crypto trading platform Shapeshift has introduced a membership program which will soon be mandatory [… the] exchange will have to begin collecting basic personal information of its users, and there will be five membership levels.” The move was met with widespread criticism especially among the experienced within the space. To then get even more flack from the institutional side of finance at roughly the same time probably isn’t what the company needed.

Shapeshift CEO Responds to Wall Street Journal Laundering Claims
Graph provided by Shapeshift.

False Pretenses, Omissions, Insufficient Understanding

“The WSJ reporters reached out to us months ago,” Mr. Voorhees details, “asking for friendly assistance on a piece about the crypto industry in general. Over a period of five months, we were open and accommodating of their questions while in contrast they misrepresented their intentions until very recently,” further complaining “they included not a single statement from those lengthy discussions, preferring instead to include out-of-context remarks I’d made elsewhere.” In Mr. Voorhees’ reckoning, the WSJ had another agenda altogether.

For any solid investigative piece to have legs, it requires statistical information for context, breadth. The company CEO takes on the journalists’ usage of basic facts, and worries they either misrepresented their significance or omitted relevant context completely. One claim had to do with $9 million being laundered through Shapeshift.

Shapeshift CEO Responds to Wall Street Journal Laundering Claims
Graph provided by Shapeshift.

“$9m (even if it was true) is 0.15% of Shapeshift’s exchange volume during the described time period; We have a strong record of complying with law-enforcement requests […]; We work with other exchanges on an almost-daily basis to identify and block thieves and criminals, through a self-policing group Shapeshift created to protect the users and industry; We block entire countries on the sanctions lists; We have an internal anti-money laundering program that uses blockchain forensics that are far more advanced (and we would argue, effective) than asking someone for their ‘name and address;’ We blacklist suspicious addresses upon learning of them,” he outlines. “There is no mention of any of this in the WSJ article.”

Good Journalism Continues Dialog After Publication

Perhaps the most frustrating issue for anyone immersed in crypto is having to explain to mainstream media the basics. If journalists miss those, their accounts and conclusions can be devastating.

“And the WSJ reporters appear to have gotten confused about how our platform functions,” Mr. Voorhees stresses. “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.”

Shapeshift CEO Responds to Wall Street Journal Laundering Claims

He goes on to list three fairly routine examples of how the WSJ allegedly got it wrong, using a $600 illustration: “In other words, $600 of suspicious funds were sent to an exchange that wasn’t Shapeshift. Because Shapeshift happens to be a customer of this same exchange – 10 months later in a completely unrelated transaction – the exchange sent funds to Shapeshift. The authors didn’t understand how to properly read the blockchain transactions, so they assumed there was $70k in ‘dirty money’ sent to Shapeshift. Allegation: $70,000 laundered by Shapeshift; Reality: $0 laundered by Shapeshift.”

In fairness, good journalism rattles cages, gets to the root, and unnerves those under its microscope. But good journalism also must be held accountable, and authors of investigative pieces have a duty to continue dialog even after publication in order to better allow readers closer proximity to supposed revealed truths. “We’ve found numerous other examples,” Mr. Voorhees complains. “We asked the WSJ to send us the specific transaction ID’s […] As of this writing, the WSJ has been unwilling or unable to send the requested transaction data necessary […].”

What do you think of the WSJ’s claims and Shapeshift’s response? Let us know in the comments section below. 


Images via Pixabay, Shapeshift. 


Be sure to check out the podcast Blockchain 2025, latest episode here. Want to create your own secure cold storage paper wallet? Check our tools section.



Source link

You may also like

Forex News

Fed Minutes note concern about slowing global growth and China

post-image


Fed minutes released online

  • Full report
  • Important to continue to monitor financial market developments
  • Noted that some downside risks had increased
  • Business investment has moderated
  • Recent household data have been strong
  • Strong labor market, inflation near target
  • See continued sustained expansion
  • A few officials concerned that uncertainty not captured by the dot plot
  • Reserves might near efficient level later this year
  • Several participants said rate hikes might prove necessary only if inflation outcomes higher than baseline outlook

Excerpts:

“Market participants pointed to a number of factors as contributing to
the heightened volatility and sustained declines in risk asset prices
and interest rates over recent months including a weaker outlook and
greater uncertainties for foreign economies (particularly…

Read More
Crypto Markets

Judge Appoints 2 Law Firms to Represent Quadrigacx Clients

post-image


Two law firms have been appointed to represent the clients of insolvent Canadian crypto exchange Quadrigacx in court. The number of affected users has been estimated at approximately 115,000 and lawyers will have to contact as many as they can. The digital asset trading platform owes them approximately $190 million.

Also read: Hacked NZ Exchange Cryptopia Allowed to Reopen

Miller Thomson, Cox & Palmer to Reach Affected Users

Nova Scotia Supreme Court Justice Michael Wood issued a decision on Tuesday, Feb. 19, announcing the appointment of Toronto-based Miller Thomson and…

Read More
Company News

Britain managing Huawei risks, has no evidence of spying: official

post-image


LONDON/BRUSSELS (Reuters) – Britain is able to manage the security risks of using Huawei telecoms equipment and has not seen any evidence of malicious activity by the company, a senior official said on Wednesday, pushing back against U.S. allegations of Chinese state spying.

FILE PHOTO: A 5G sign is seen during the Mobile World Congress in Barcelona, Spain February 28, 2018. REUTERS/Yves Herman/File Photo

Ciaran Martin, head of Britain’s National Cyber Security Centre (NCSC), said Britain had yet to decide on its security policy for national 5G networks, but that Huawei equipment was subject to detailed oversight and strict government controls over where it was used.

“Our regime is arguably the toughest and most rigorous oversight regime in…

Read More
Investing

Amid trade talks, China urges U.S. to respect its right to develop, prosper

post-image


BEIJING (Reuters) – The United States should respect China’s right to develop and become prosperous, the Chinese government’s top diplomat told a visiting U.S. delegation, reiterating that the country’s doors to the outside world would open wider.

Myron Brilliant, executive vice president and head of International Affairs at the U.S. Chamber of Commerce (2-L) and Chinese State Councilor and Foreign Minister Wang Yi (2-R) attend a meeting at the Ministry of Foreign Affairs in Beijing, China February 19, 2019. Wu Hong/Pool via REUTERS

The world’s two largest economies began their latest round of trade…

Read More
Crypto Markets

In the Daily: Elon Musk Talks Bitcoin, Shanghai’s Fudan University, Xdat Exchange

post-image


In this edition of The Daily we cover some largely supportive remarks the famous entrepreneur Elon Musk has made about Bitcoin, the latest academic institution to launch a blockchain R&D center, and a new offering from Malta-based exchange Xdat.

Also Read: Bank of Spain Report: Bitcoin Is a Solution for a System Without Censorship

Elon Musk Talks Bitcoin

The founder of Tesla and Spacex, Elon Musk, is once again making headlines about crypto. He recently went on the Ark Invest podcast to discuss the future…

Read More