WSJ Report: $88.6 Million Laundered in Illicit Funds Through Crypto Exchanges

WSJ Report: $88.6 Million Laundered in Illicit Funds Through Crypto Exchanges

cryptocurrency exchange News
September 29, 2018 by Jane
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A recent report from the Wall Street Journal reveals that over $100 million in illicit funds have been funneled through cryptocurrency via crypto exchanges. And the report details that at least 46 cryptocurrency exchanges around the globe assisted criminals in laundering more than $88 million over the past two years. According to the report by WSJ, the largest
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A recent report from the Wall Street Journal reveals that over $100 million in illicit funds have been funneled through cryptocurrency via crypto exchanges. And the report details that at least 46 cryptocurrency exchanges around the globe assisted criminals in laundering more than $88 million over the past two years.

According to the report by WSJ, the largest portion of stolen funds (28. $9 million) were reportedly sent via the multi-coin exchange Shapeshift.

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.

ShapeShift is a Switzerland-based digital currency exchange that was formed in 2014 by Erik Voorhees. Unlike other trading platforms, ShapeShift allows users to anonymously trade Bitcoin (BTC), which police can track, but can not identify the individual behind the transaction.

The WSJ report also presented evidence from security researchers, supposedly proving that criminals used ShapeShift to exchange bitcoin for Monero, an anonymity-centric cryptocurrency.

Following the WannaCry ransomware attack, in which hackers from South Korea extorted millions of dollars from governments and businesses, the investigation traced the extorted BTC to ShapeShift. It went on to say that the exchange didn’t change its policy even one year after the attack, and continued to launder criminal funds that eventually became untraceable.

However, Veronica McGregor, the chief legal advisor to ShapeShift sharply criticized the WSJ report, stating its facts are cherry-picked and that the reported tainted trades amount to only 0.2 percent of ShapeShift’s overall volume.

He further commented that they are preparing to comply with the existing AML and KYC regulations in the wake of future crypto regulations.

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