Prominent cryptocurrency exchange service ShapeShift has disclosed the number of times it has been forced to give up information about its users to international authorities.
In a blog post, ShapeShift revealed it has “assisted” law enforcement agencies with 60 different inquires last year, 30 percent of which came from the United States.
A significant number of enquiries made by authorities from Germany, the UK, and France were also recorded.
ShapeShift will give up everything upon request
According to ShapeShift, the process of requesting user data typically starts when an agency thinks it has documentation that could assist a cryptocurrency-related investigation.
Often, this is because police, victims, or other involved parties have tracked suspicious funds on their way to a ShapeShift-controlled wallet.
“When we receive these requests, we usually don’t know anything about the details of the investigations or what the information is being used for, just what information is required by the subpoena,” declared ShapeShift. “Most investigations are confidential, meaning that we’re not at liberty to discuss any specifics of the investigations with any third parties.”
ShapeShift says the requested information varies ‘wildly.’ It has complied with requests for names, emails, IP addresses, cryptocurrency addresses, transaction IDs, and even information related to the digital asset portfolio of specific users.
It also notes that the turnaround time for these requests is usually between one and two weeks. ShapeShift also confirmed it has responded to every verified request it received last year.
Absolutely nothing to see here, honest
In the end, ShapeShift wants you to know that this is apparently standard practice in the cryptocurrency world.
“Requests of this type, especially in the cryptocurrency industry, are common, and based on our number of transactions and user volumes, this seems to be pretty typical,” it implored.
ShapeShift drew widespread criticism last September, when it suddenly opted to enforce strict Know-Your-Customer and Anti-Money-Laundering (KYC/AML) policies for all of its users in a bid to appease regulators.
It means anyone looking to use ShapeShift’s exchange service must provide identity documents and other personal information, something many cryptocurrency fans consider to be incredibly offensive.
The effects of the backlash were truly felt earlier this month, when the company announced it was “letting go” 37 of its staff, roughly one-third of its workforce.
Some consider rigorous KYC/AML procedures as a logical next step on the path to institutionalized cryptocurrency, as it’s supposedly better to work with regulators than against, even if it means sacrificing privacy.
The unfortunate truth is that ShapeShift (and other similar services) are happily serving as an additional surveillance layer on top of the cryptocurrency ecosystem; fine-tuned to accommodate government agencies at the drop of a hat.
Rather than supporting the digital money revolution, these businesses may soon be considered simply tools for undermining the censorship resistance provided by cryptocurrencies like Bitcoin – and I suspect that just won’t fly with the purists.