Investigation agency CipherBlade has carried out forensic research into money laundering accusations WSJ made against ShapeShift AG, questioning some of the reporting's numbers and premises.
In September, WSJ published an article claiming Shapeshift enabled laundering of almost $9 million. According to WSJ, traceable cryptocurrencies were exchanged into non-traceable tokens, such as monero. According to CipherBlade’s research, the Journal's accusations were greatly overstated. The agency's data claims that in fact less than $2.3 million can be attributed to possible money laundering.
“In short, the WSJ used flawed methodology which generated highly inflated claims that were used to single out one exchange for transactions that are neither unusual nor illicit,” CipherBlade writes.
CipherBlade describes WSJ’s methodology as “fundamentally flawed” which it claims led to overstating the laundering claim “by a factor of 4x.” In fact, just 1 per cent of all ETH traded came from suspicious wallets. Moreover, only a small amount of funds—0.33 per cent of the ETH that had come from suspicious wallets—was exchanged for monero, even though WSJ claimed dirty assets were exchanged to this specific cryptocurrency to make them untraceable.
According to CipherBlade, “Of the ShapeShift addresses which receive ETH within three hops from the initial dirty addresses, less than half of the ETH traded through them are tainted. Less than one third of that tainted ETH is traded for Monero.”
As far as CipherBlade research shows, the total value of tainted ETH that has been traded through ShapeShift was $2,117,804.70; adding another 40.11 BTC that have been tainted does not come close to the $9 million WSJ traced.