A Switzerland based cryptocurrency exchange which is one of the anonymous exchanges that handles Bitcoin trades, Shapeshift founded by Erik Voorhees in 2014 has been accused of aiding money laundering by Wall Street Journal investigation after the later found that $88.6 million was laundered through 46 cryptocurrency exchanges and about 21% which is equal to $9 million was done through Shapeshift exchange.
Shapeshift believes that even though its platform allows users to carry out transactions anonymously that can not police investigation because the identity of such users will not be Revealed Or Known.
Wall Street Journal investigation team developed a computer program that monitored about 2,500 suspected crime sites, fraudulent scheme and investment frauds and how such money collected where moved, after using Ethereum or Bitcoin as their payment cryptocurrencies.
From the WSJ analysis of money moved through Shapeshift every 15 seconds, it was discovered that the fraud masters immediately convert the fund to Monero which is one of the privacy coins like Zcash.
But in an interview with Wall Street Journal, the CEO of Shapeshift Erik Voorhees said that he does not think that “people should have their identity recorded to catch an occasional criminal.”
Veronica McGregor, the chief legal officer at Shapeshift, told Wall Street Journal in an interview after the later provided her with evidence of the addresses that had involved in this that the exchange on it’s own had already blacklisted the fraudulent addresses and that the addresses could no longer be used in the shapeshift platform even though they are already preparing to start user identification by Oct 1.
Commenting on Erik Voorhees’s stance on the matter, McGregor said 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.”