ShapeShift, the instant crypto exchange established in 2013, received 175% more law enforcement requests in the second half of 2018 than the first, according to figures released by the company. This time period coincides with the introduction of user registration on ShapeShift, including KYC/AML, that the exchange was forced to introduce in October and which founder Erik Voorhees called and “Orwellian construct”.
US Dominates Requests
The figures were released as part of ShapeShift’s Compliance Transparency report, which broke down all the requests for information from law enforcement agencies, what information was typically asked for and how such requests were dealt with. The report shows that 60 requests for information were made throughout 2018, with the US leading the way with 18, 10 ahead of second-placed Germany. Of the 18 US requests, 6 came from the FBI, and 5 from the SEC. Only 16 requests came in the first half of the year, with the rest coming in the second half.
Amount of Requests “Normal”
The report also breaks down the process ShapeShift undergoes when dealing with such requests. They mostly come via a subpoena (in the US) and the information sought can vary from something as simple as the amount of times a certain address has been used to all the information on a single transaction (addresses, transaction IDs, IP addresses, and more). ShapeShift knows nothing about the cases themselves and are not told more than they need in order to extract the information requested.
ShapeShift Data Fits the Trend
In the report, ShapeShift reassure their users that requests and subpoenas are normal practice for exchanges and the sudden rise is not something they should worry about, stating, “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.” Kraken also publish their data on information requests, and on January 6 revealed broadly similar results, with an increase in requests in the second half of 2018, backing up ShapeShift’s sentiment.