Over 46 cryptocurrency exchanges around the globe assisted criminals in laundering more than $88 million over the past two years, a Wall Street Journal report alleges.
Money Laundering Pervasive in Crypto Trading Industry: Report
The Journal’s investigation traced funds from over 2,500 wallets that courts flagged for their involvement in criminal activities. The paper partnered with London-based blockchain forensic company Elliptic to trace funds from wallets to exchanges. Also, to identify intermediary portfolios, which could have belonged to crypto exchanges, the Journal downloaded and compared them to the wallet addresses of suspected exchanges.
ShapeShift AG, the report alleged, was one of the largest recipients of illicit funds to have offices in the U.S., processing over $9 million out of the suspected $88 million over a two-year period. The Switzerland-incorporated-but-U.S.-operated altcoin exchange service lets people trade bitcoins and other digital currencies anonymously. Recently, though, ShapeShift announced that it would oblige with KYC standards from Oct. 1 to “de-risk” itself.
However, the Journal didn’t cut ShapeShift any slack for this change of heart, indicting the exchange for facilitating tainted transactions. Notably, the paper highlighted ShapeShift CEO Eric Voorhees‘ liberal take on anonymity on many occasions — frequently citing his views against AML laws or laws that require exchanges to perform KYC on every customer to catch an occasional criminal — to prove the exchange’s alleged unapologetic involvement in laundering money.
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