ShapeShift forced to ‘help’ police with 60 cryptocurrency inquiries last year

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.

The FBI and the SEC were noted as the most common US agency to request user information from ShapeShift last year, with November being the post popular month for subpoena requests.

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.

US government building tools to deanonymize anonymous cryptocurrencies

If you thought you were safe using privacy coins like Zcash and Monero you might want to think again.

It appears that the US Department of Homeland Security (DoHS) is looking to develop forensic analysis techniques for privacy-focused cryptocurrencies like Zcash and Monero, according to a pre-solicitation document spotted by The Block .

The document was published by the the DoHS’s Small Business Innovation Research Program (SBIR), and outlines a proposal that is encouraging small businesses to develop research, process, products, and technologies that create techniques that can be used to detect and uncover crimes where cryptocurrencies have been used.

The “ proposal calls for solutions that enable law enforcement investigations to perform forensic analysis on blockchain transactions,” the document reads.

The SBIR lays out a three stage process for developing the forensic tools, with the first phase being to design a blockchain analysis system that “enables forensic analysis for homeland security and law enforcement applications for cryptocurrencies, such as Zcash and Monero.”

The second phase is to prototype these tools using test data, to demonstrate how they would be used by authorities. The third and final phase will be integration of these forensic tools into commercial or governmental applications, which will allow the authorities to track and trace cryptocurrency transactions – and hopefully catch cyber-criminals.

It should be noted that this is a pre-solicitation document, meaning it is opening the floor for any SBIR registered businesses to ask questions about the proposal. It’s not an invitation for product proposals – yet. These are likely to come towards early 2019, as the solicitation period comes to a close on December 18.

It’s perhaps no surprise that the DoHS is focusing on Zcash and Monero. These two coins are known for being used by terrorist organizations, crypto-jackers , and cyber-criminals as they offer more privacy options than more conventional cryptocurrencies. But it looks like they won’t be so private for much longer, if the DoHS gets its way.

South African man hands thugs $60K in Bitcoin after heinous torturing

It seems cryptocurrency scammers aren’t afraid of using more old school tactics in order to extort Bitcoin from their victims.

A man from South Africa was purportedly attacked for his Bitcoin by someone he met on Facebook, according to local news outlet, the Soweto Urban .

The attack took place on November 16 where the man, known as Andrew, was lured to give a presentation about Bitcoin in Ntuli Street in Meadowlands Zone Five, the report states.

It appears Andrew was drugged shortly after entering the premises to give his presentation. The Bitcoin trader claimed that a “drug-infused” cloth was used to cover his face, causing him to pass out. When he awoke, he claims to have been in a different location.

According to local police reports, Andrew was stripped of his clothing and tortured by attackers in attempts to extort his Bitcoin password. The attackers branded him with a hot iron and threatened to kill him if he didn’t comply.

To preserve his own life, Andrew eventually gave in and complied with his attackers demands. He transferred 800,000 rand (about $60,000) worth of Bitcoin to the attacker’s account. After the attack, he was blindfolded, taken, and left at Kliprivier Road on the R550, some 30km away from the scene of the attack.

The thieves also robbed him of 3,000 rand ($200) in cash, two laptops, and two iPhones.

Local police are currently investigating the crime as Andrew recovers in the intensive care unit at Alberton Union Hospital.

Indeed, using old-fashioned force and brutal tactics seems to be an unfortunate growing trend.

Last month a group of friends beat up their other friend to try and extort him of his cryptocurrency. Though in that story, the victim turned out to have hacked and stolen the cryptocurrency anyway , what goes around comes around. Hopefully things will turn out better for Andrew.

Hunter Jones

Hunter Jones

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