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CyberScoopNews journalist Patrick O’Neill revealed on August 3 that ShapeShift, the cryptocurrency market’s most popular instant digital asset exchange, began to assist law enforcement to track bitcoin received and traded by the distributors and developers of the WannaCry ransomware.

In an interview with O’Neill, Neutrino chief technology officer Alberto Ornaghi, noted around $20,000 was withdrawn from one of the bitcoin wallets tied to the WannaCry ransomware. It was further revealed that bitcoin withdrawn from the WannaCry ransomware wallet was exchanged for Monero on ShapeShift.

Almost immediately after the ShapeShift team was notified with the movement of the WannaCry ransomware’s bitcoin funds, its legal team announced that the usage of the ShapeShift digital asset exchange platform by WannaCry distributors to launder bitcoin breached its terms of services. The ShapeShift team further emphasized through an official statement that it will cooperate with law enforcement to trace the transactions of the WannaCry ransomware team.

The ShapeShift team said:

As of today, we have taken measures to blacklist all addresses associated with the WannaCry attackers that are known to the ShapeShift team, as is our policy for any transactions we deem breach our terms of service. We are closely watching the situation as it continues to unfold as to block any further addresses associated.

ShapeShift has been widely recognized by the cryptocurrency industry, market and community as the most efficient and private exchange to trade alternative cryptocurrencies or altcoins, because it does not require users to provide any personal information or financial data when trading digital currencies on its trading platform.

However, various bitcoin experts, developers and privacy advocates including TDevD, or Crud, the developer of Samourai Wallet, criticized ShapeShift for cooperating with the authorities and creating blacklists on an exchange that was supposed to be privacy-focused.

Some claimed that the ShapeShift team’s decision to cooperate with law enforcement was ironic and hypocritical to an extent, as ShapeShift was one of the few companies that terminated their services in the state of New York after the implementation of the BitLicense, which required companies to integrate strict Know Your Customer (KYC) and Anti-Money Laundering (AML) systems.

Crud said:

Shapeshift working with authorities and creating blacklists. Just beautiful. 

More to that, Crud noted that Samourai stripped out the ShapeShift API months ago.

Yes, absolutely. We have. Stripped out their API months ago.

In all fairness to ShapeShift, it was a difficult decision for ShapeShift, a team led by Eric Voorhees, who has tried to offer privacy and financial freedom to the users of ShapeShift since its launch, to cooperate with law enforcement. If the company declined to participate in the investigation, it could have led to a legal conflict between ShapeShift and law enforcement.

The statement of ShapeShift revealed:

Any transactions made through ShapeShift can not be hidden or obscured and are thus 100 percent transparent, making laundering of any digital tokens impossible.

It is still unclear whether the ShapeShift team and law enforcement will be able to trace down the transactions of the WannaCry ransomware team as Monero, the cryptocurrency that was used to launder WannaCry funds, is anonymous by nature.

As Ornaghi explained:

You cannot track a Monero address. You cannot even check the balance or when the address is used to move the funds. Monero hides both ends of a transaction as well as the amount.

Featured image from Shutterstock.