Crypto exchange ShapeShift Aided in 60 Cryptocurrency Enquiries Last Year

  • Crypto exchange ShapeShift revealed how many disclosure requests it received from law enforcement during 2018.
  • ShapeShift's management explained that all transactions they process are published on their website.

Erik Voorhees, the founder and CEO of “instant” cryptocurrency exchange ShapeShift, recently informed his followers via Twitter that his company decided to share how many disclosure requests they’ve received from law enforcement.

ShapeShift "Assisted With 60 Law Enforcement Inquiries" In 2018

Voorhees, who is the founder and one of the previous owners of Satoshi Dice, a bitcoin (BTC) gambling website, noted that US-based crypto exchange, Kraken had “inspired [his firm] to convey similar transparency in law enforcement requests.” As CryptoGlobe reported on January 6, Kraken’s management had received 475 disclosure requests from regulators during 2018. Most of the requests had reportedly come from authorities in the US, UK, and Japan.

In an official blog post, ShapeShift’s team noted:

Because of the nature of our business, ShapeShift regularly receives requests from various law enforcement agencies. In the traditional financial world, this request process is typically opaque. In 2018, ShapeShift assisted with 60 law enforcement inquiries from around the world.

Similar to how regulators from several different jurisdictions contacted Kraken’s management for disclosure regarding various aspects of their business operations, ShapeShift’s blog explained that legal requests “often take the form of subpoenas from a court (in the US) or other government agency, but each country has its own formal legal process.”

ShapeShift Only Responds To "Official Legal Requests"

Because finance is a “heavily regulated” industry, “getting subpoena requests happens often,” the blog stated. ShapeShift’s blog revealed that “in relation” to the total number of inquiries law enforcement agencies send each year, the “requests related to cryptocurrency transactions are miniscule.”

A subpoena is “a court-ordered request” which requires an organization to respond by providing the necessary information, the blog noted. It also explained that one type of subpoena “requires testimony before ... a legal authority.” The second, most common type of subpoena, which ShapeShift “regularly receives,” are requests for “documents, materials or other types of evidence.”

According to ShapeShift, the company has ”always made all transactions through our system public.” After processing customer transactions, the details of the transfer are published on ShapeShift’s website and via the firm’s APIs.

Law Enforcement May Ask For Users' Emails, IP Addresses

The exchange further noted that this type of transparency in financial transactions is quite helpful. For instance, it is easy to review the transaction history when “the victims or other parties involved have identified that their funds related to the incident may have reached ShapeShift.” Clarifying that ShapeShift’s management only responds to “official legal requests,” the company’s legal and compliance team gathers all the required information (as mentioned in the subpoena).

Notably, “most investigations are confidential”, meaning that ShapeShift is not allowed to disclose any details regarding the subpoenas from authorities. Some of the information requested includes “crypto address (in or out of our system), transaction IDs, or it could include names, emails, IP addresses, [and] coins/asset” transfer details, the exchange detailed.

CoinBits Allows Users to Earn Passively By Converting, Saving Change in Bitcoin

Erik Finman, an early Bitcoin (BTC) adopter, has launched a crypto platform called CoinBits, which allows investors to passively invest in the flaghship cryptocurrency.

According to TechCrunch, Finman’s new app, CoinBits, intends to democratize access to cryptocurrency by allowing people from all walks of life to make small investments through commonly-used investment and savings strategies. These reportedly include roundups on transactions made via credit or debit card purchases.

The CoinBits app will also support conversion of fiat currency to bitcoin via regular transactions from users’ checking or savings accounts. While CoinBits has been designed to mainly benefit its users, Finman revealed that his own BTC holdings will also grow as more people use the small savings app.

No Commissions on Transactions, 98% of Bitcoins Stored Offline

As explained on CoinBits’ official website, users can invest small amounts such as $10, $25, $50, or $100 through the app’s web-based interface. The savings app also lets users adjust the risk level for their investments.

Notably, the CoinBits app does not charge transaction fees and 98% of users’ bitcoins are kept securely in cold storage (offline).

Explaining how investing in cryptocurrencies can be challenging for some people, due to their highly technical nature, Finman said:

Overall, investing in bitcoin is complicated and can feel almost impossible. CoinBits allows you to put that spare change in bitcoin. For example, if you spend $1.75 on French fries, that remaining 25 cents is invested automatically.

As noted on CoinBits’ website, the company handles withdrawals and users are charged a $0.50 fee for same-day processing. There’s also an option to download the transaction history associated with users’ accounts. This makes it easier for users to manage their finances and track how much they may have gained or lost on their bitcoin investments.

Crypto-Backed Lender Receives $25 Million in Deposits Two Weeks After Launch

As the crypto and blockchain ecosystem continues to evolve, many new startups have been offering different products and services which allow users to earn passively on their digital asset holdings. In March 2019, BlockFi Lending LLC, a New York-based “secure non-bank lender” announced it had received $25 million in cryptocurrency deposits just two weeks after launching its crypto-backed loans packages.

BlockFi’s investment packages allow users to earn interest on their Bitcoin (BTC) and Ether (ETH) investments.