When it comes to cryptocurrency transactions, questions about alleged money-laundering quickly get thorny.
A Wall Street Journal investigation from last September, titled “How Dirty Money Disappears Into the Black Hole of Cryptocurrency,” claimed the crypto conversion platform ShapeShift had facilitated at least $9 million worth of money laundering over several years with “a parade of suspected criminals.”
Now, at ShapeShift’s request, the blockchain analytics firm CipherBlade recreated the 2018 report and found less than $3 million in transactions involving potentially “tainted” funds.
The main distinction here is that CipherBlade focused on allegedly tainted coins instead of the total value held in each affiliated wallet or account.
“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,” the CipherBlade report says. “Using the most generous assumptions, this is still only 23.53 percent of the WSJ’s claimed $9 million.”
Add to that ether to roughly 40 bitcoin, which ShapeShift itself found to be associated with suspicious wallet’s the WSJ identified, and the total estimate falls just shy of $3 million.
When asked about the investigative process, a WSJ spokesperson told CoinDesk:
“An analysis looking at individual tainted ethereum coins, rather than tainted wallets, would be a different project than what the Journal embarked on, and one we can’t comment on because we have not reviewed it.”
All parties agree the most pessimistic reading of the data still indicates questionable transactions made up a pittance of ShapeShift’s volume since the company was founded in 2014. According to a tweet by CEO Erik Voorhees, ShapeShift processed crypto worth $30.3 million a month in 2017 alone.