Last week an article was published by the Wall Street Journal that attacked ShapeShift.io, making the service out to be a service used only for criminal purposes and even grounded in criminal or undesirable principles. The authors research showed them that $88 million was laundered across 46 exchanges in two years. They highlight the $9 million through ShapeShift as the largest sum sent through any U.S.-based exchange.
“How Dirty Money Disappears Into the Black Hole of Cryptocurrency” uses creative language throughout to mask a serious lack of data and real information on the subject matter:
“A parade of suspected criminals has taken advantage of ShapeShift’s services since the exchange began in 2014, according to law-enforcement officials, independent researchers and the Journal’s investigation.”
What ShapeShift Represents
Users can trade any digital asset without waiting for deposit confirmations and putting up bid orders. Other companies, such as Overstock.com, are plugging into the ShapeShift APIs, so all of their users are potentially introduced to cryptocurrencies. But the hybrid exchange provides a serious service that has implications much deeper than just internet shopping.
"We still firmly believe that individuals, regardless of their race, religion, or nationality, deserve the right to financial privacy, just as they deserve the right to privacy in their thoughts, in their relationships, and in their communications. Such privacy is a foundational element of a civil and just society, and should be defended by all good people. We remain committed to that cause and it is best served if we are smart about our approach.” - Erik Voorhes
Instead, only the fact that it has been used for money laundering is represented. Further, the fact that physical cash allows anonymous transactions is ignored.
Wrongly Knocking Switzerland
The WSJ article uses some really particular language to attempt to make the company sound less legitimate. “The company is officially registered in loosely regulated Switzerland.” Shapeshift was founded in the country in 2015, but as with the misguided information regarding how cryptocurrency transactions are processed, the article is seriously misrepresenting the laws in place in Switzerland.
Only several of the 250 banks in Switzerland ever allowed companies to deposit the cash equivalent of cryptocurrencies raised from ICOs. Last year, two of those withdrew the service. Zuercher Kantonalbank (ZKB) closed the accounts of over 20 companies. CEO of ShapeShift.io Erik Voorhes responded in a blog post, refuting their claims with many questions in return.
"Unlike most other exchanges, ShapeShift is a crypto-to-crypto, non-custodial platform. We don't take custody of user funds, but instead swap our own assets for theirs, at a set price. We don't touch fiat currency, so users cannot swap their dollars/euros/yen for our bitcoin/ethereum/dogecoin. Not a single dollar, euro, or yen has ever been laundered through ShapeShift. It can't be done."
He believes the current monetary system has systemic problems. He advocates for separation of money and state.He was also founder and former CEO of Coinapult, a system that allowed transfers of bitcoin via SMS and email.
By: BGN Editorial Staff