CipherBlade Accuses WSJ Of Using Faulty Methods In ShapeShift Investigation

CipherBlade, the blockchain intelligence company accused the Wall Street Journal (WSJ) of using faulty methods in the investigation of the crypto exchange platform ShapeShift by overestimating the amount of money laundered via the exchange. More on this analysis, we read in our crypto news below.

CipherBlade published a report on their blog post yesterday as it says that the WSJ published a long document for the fall of 2018 that ShapeShift facilitated the laundering of more than $9 million via cryptocurrencies.

As previously reported on our DC Forecasts website, the Wall Street Journal claimed that the exchange processed more millions of dollars and that most of the money was later converted into privacy coins such as Monero. CipherBlade made a lengthy analysis of the investigation where it shows that:

 “By tracing alleged ‘laundering’ through ‘no more than two intermediaries before reaching an exchange’, the WSJ’s stated methodology was fundamentally flawed […] The tracing of any funds — illicit or not — over the course of multiple transactions is extremely difficult, and presenting the total contents of subsequent wallets as illicit is forensically unsound.”

CipherBlade stated that WSJ’s claims were distorted and that by using a decent forensic method would show a granular tracing of privacy coins:

 “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. Using the most generous assumptions, this is still only 23.53 percent of the WSJ’s claimed $9 million.”

CipherBlade also wrote a dozen of criticism of the technical analysis of WSJ but also for its collected data that doesn’t support their own conclusions. The intelligence company noted that most of the addresses from ShapeShift to WSJ’s spreadsheet, only 30 percent correspond to trades that turn out to be exchanged coins for Monero. The company is also focused on money laundering by using the Ethereum (ETH) cryptocurrency and its network since in some cases, privacy coin conversions were involved and also didn’t pay much attention to the Bitcoin-related data that was provided by the Wall Street Journal.

ShapeShift founder and CEO Erik Voorhees also stated that the claims made by the WSJ were ‘’factually inaccurate and deceptive’’ and that the authors didn’t really understand blockchain or cryptocurrency technology.