Home News ShapeShift reported a 175% increase in the number of law enforcement requests

ShapeShift reported a 175% increase in the number of law enforcement requests

Swiss cryptocurrency exchange ShapeShift released a Transparency Compliance report showing a 175% increase in the number of requests from law enforcement agencies in the course of the second half of 2018.

According to ShapeShift’s official blog post on the matter, most law enforcement requests are for user data, including cryptocurrency addresses (both inside and outside ShapeShift ecosystem), transactions data, personal data (names, email and IP addresses), crypto asset information and more.

The company revealed that, in most cases, law enforcers did not disclose any details on investigations in relation to the requests. All in all, Q3 and Q 4 2018 saw ShapeShift receiving 44 subpoenas, that is, 175% more than in the first half of the year.

The greatest number of subpoenas (18) was received from the U.S. law enforcement authorities. Among these, 6 were issued by the FBI, 5 by the Securities and Exchange Commission (SEC), 3 by the state level authorities, 2 by the Department of Homeland Security (DHS) and 1 by the Commodities and Futures Trading Commission (CFTC). Another 18 requests came from Germany (8), the UK (6) and France (4).

According to ShapeShift, the exchange was able to respond to all verified inquiries within 1-2 weeks time frame. The exchange’s analysts note that other crypto exchanges have been facing the increasing number of law enforcement requests too. For instance, as reported earlier this month, Kraken revealed it had received nearly 475 law enforcement requests last year, as compared to 100 requests in 2017.

ShapeShift announced the introduction of compulsory user registration and verification system in September 2018. Jake Chervinsky, a lawyer from Washington D.C., stated that the moves taken by the cryptocurrency startup had in fact been fuelled by the pressure from regulators, which “silently invade crypto”. Back then, ShapeShift’s CEO Erik Voorhees confessed that the compulsory registration was a painful but necessary measure dictated by the unclear regulatory environment:

“Yes, that last detail sucks. We would prefer if the collection of personal information were not a mandatory element. We still firmly believe that individuals, regardless of their race, religion, or nationality, deserve the right to financial privacy, just as they deserve the right to privacy in their thoughts, in their relationships, and in their communications. Such privacy is a foundational element of civil and just society and should be defended by all good people. We remain committed to that cause, and it is best served if we are smart about our approach,” – he wrote.

Earlier this month, Erik Vorhees announced large-scale layoffs in his company with 37 persons leaving the team. Voorhees apologized to those dismissed, while telling about the challenges his company had to face in 2018.