Law enforcement requests seem to have increased 175% for ShapeShift during the second half of 2018. ShapeShift is a popular Switzerland-based cryptocurrency exchange. The information was released by the exchange a few days ago in a Compliance Transparency report.
ShapeShift Law Enforcement Compliance
Due to the fact that cryptocurrencies and blockchain technology continue to grow around the world, companies must be prepared to be compliant with regulatory agencies. The legal framework is constantly changing in the industry and creates different challenges for companies in the space.
According to the report, ShapeShift assisted with 60 law enforcement inquiries from different countries around the world. The largest number of requests came from United States agencies, with 18 inquiries. The U.S. was followed by Germany, the United Kingdom and France with 8, 6 and 4 requests respectively.
The month with the largest number of law enforcement requests was November, with 13 inquiries. January and June did not register any request. The second part of the year registered 44 inquiries compared to the first part when ShapeShift was contacted by regulatory agencies just 16 times. This shows that there was a more active role of regulators during the second part of 2018.
ShapeShift informs that in the United States, these requests take the form of subpoenas from a court or government agencies. However, each country has its own legal process and the procedures are different.
The exchange explained on the matter:
“Basically, a subpoena is a court-ordered request compelling a person or company to take some sort of action. There are two types of subpoenas in the U.S. The first kind requires testimony before the court or a legal authority. The second type is a request for documents, material or other types of evidence (these are the types of subpoenas that ShafeShift regularly receives).”
ShapeShift commented that it is very common to receive subpoenas. The cryptocurrency industry is growing and companies are receiving these requests. TechCrunch Founder, Michael Arrington, explained that they’ve received a subpoena and that every crypto-related fund he talked to has received at least one.
This is not the first time that a crypto company publishes the information about the legal requests during a specific year. Kraken, another crypto exchange, shared with the community a chart with the latest information related to law enforcement requests received. According to Kraken, the number of inquiries went up three times in 2018 compared to 2017. The exchange received 475 law enforcement requests in 2018 compared to 160 in 2017.
Peek at our Compliance team's 2018 Transparency Report. You can see why many businesses choose to block US users. Cost of handling subpoenas (regardless of licenses) is quickly becoming a barrier to entry. Inquiries up 3x YoY. pic.twitter.com/YbyLEqhOUf
— Kraken Exchange (@krakenfx) January 5, 2019
