Blockchain intelligence firm CipherBlade has accused the Wall Street Journal of using flawed investigative methods and thus overestimating the extent of alleged money laundering via crypto exchange ShapeShift.
CipherBlade's analysis of the WSJ report was published in a blog post on March 20.
As reported, the WSJ published a lengthy exposé in fall 2018 that alleged ShapeShift had facilitated the laundering of at least $9 million via cryptocurrencies - purportedly more than any exchange with offices in the United States in the course of the Journal's investigations.
The WSJ had claimed that the exchange had processed millions of dollars in criminal proceeds, a high proportion of which were purportedly being converted into privacy coins such as Monero.
"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."
"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 critiques not only the WSJ's technical analysis, but also the data itself, which reportedly does not support their conclusions, even if taken at face value.
"Of the 5523 ShapeShift addresses in the WSJ's spreadsheet that actually correspond to trades, 30.38% of the BTC and a mere 5.53% of the ETH that was sent to those addresses were exchanged for Monero."
CipherBlade notably focused on alleged laundering using Ethereum paths - in some cases involving conversion into privacy coins - and did not scrutinize the Bitcoin-related data used by the Journal.
As previously reported, ShapeShift founder and CEO Erik Voorhees rebutted the claims of the WSJ report shortly after its publication, claiming it was "Factually inaccurate and deceptive," and that its authors did not have a sufficient understanding of cryptocurrency technology.
WSJ Claim of $9 Mln Laundered Via Shapeshift Based on Flawed Investigation, Analysts Say
Publié le Mar 21, 2019
by Cointele | Publié le Coinage
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