Analytics firm, CipherBlade disproves WSJ's accusations to ShapeShift

23 Mar, 2019 | Updated: 23 Mar, 2019
by Fifi Arisandi
News
Analytics firm, CipherBlade disproves WSJ's accusations to ShapeShift

CipherBlade, the blockchain analytics company that ShapeShift's CEO asked to investigate The Wall Street Journal (WSJ)'s accusations released their investigation report. 

The Wall Street Journal – ShapeShift.io drama is not over yet.

After the media reported that ShapeShift is responsible for the laundering of $9 million of funds last September, ShapeShift CEO, Erik Voorhees fired back by criticizing the integrity of WSJ’s journalists that withheld information for months in order to build their story.

Read more: WSJ report claims that $88.6 million laundered through crypto exchanges; ShapeShift CEO responds to Wall Street Journal exposé

At the time, Voorhees denied the accusations and insisted that his company had tried to comply with regulations as much as possible, despite not implementing any know-your-customers (KYC) procedures.

In addition, the CEO also requested a blockchain analytics firm, CipherBlade to investigate the matter by conducting an independent analysis on the Ethereum transactions that were claimed to be laundered through the Swiss-based exchange.

After months of investigation, on May 21st, the appointed firm released a report that concluded all their findings and analysis.

Posted on their Medium account, the report is titled, “How Truth Disappears Into the Black Hole of Shoddy Journalism” which resounds to WSJ’s article title that started everything in the first place, “How Dirty Money Disappears Into the Black Hole of Cryptocurrency.”

Among the analysis result’s breakdown, the below claims are probably the most interesting ones.

CipherBlade’s report claimed that WSJ’s investigation methodology is flawed as it didn’t fully take account of how the actual crypto transactions take place.

When a more proper methodology is applied, the team found that only 1% of the ETH from the suspicious wallets was traded for any asset through ShapeShift, which is way below WSJ’s claim.

The team also pointed out on WSJ’s so-called cooperation with blockchain forensics company, Elliptic, on which they said, “The WSJ claims to have worked with the blockchain forensics company Elliptic, which remains unconfirmed."

"In fact, Elliptic’s “media mentions” page on its website avoids touting any such partnership with the WSJ or even linking to the article,” they added further.

The full report and comprehensive explanation can be found on CipherBlade Medium account.

Joining the conversation is Pawel Kuskowski, CEO of Confirm. He said that there’s no definite answer to the exact amount that may have been laundered through ShapeShift since the platform hasn’t performed KYC procedures since last October.

While, other analysts also stated that CipherBlade’s report only focused on ETH and excluded Bitcoin-related data, which was also included on WSJ’s investigation.

At the same time, they also referred to the report on crypto platform risks, which put ShapeShift as “high-risk”, despite the claim from CipherBlade, as reported by 21cryptos.

Regardless of the ongoing controversy, ShapeShift is said to have revamped its sign up and KYC procedures, which probably came as an effort to further support and align itself better with the claim of CipherBlade.

How the WSJ-ShapeShift feud will go from here? Stick with Chepicap to find out.

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