ShapeShift Is Back In the Game With CipherBlade’s Forensic Report Help, Debunking WSJ’s Research
ShapeShift Is Back In The Game With Help Of CipherBlade
ShapeShift has not held the best reputation lately, especially after the Wall Street Journal stated that they had participated in the laundering of around $9 million. This week, ShapeShift retorted with new proof against the claims – a “forensic review,” performed by a third-party analyst. The report stated that the WSJ had overstated the results to the tune of $6 million.
It did not take long for consumers online to find a link between ShapeShift and CipherBlade, which is the company that penned the report. However, that is not all they found. In their hunt, these self-made investigations discovered a group of small companies that appeared to be linked to unsavory businesses.
Cas Piancey, a crypto skeptic on Twitter who is well respected by investors, pointed out clear connections between the director of CipherBlade – Genevieve Magnan – and multiple shell companies that were involved with the Panama Papers scandal.
I really like The Block – especially Larry, Frank, and Steven.
This article is fluff put out by Shapeshift and they should've known better. Proof is that the director of CipherBlade is listed in the Panama Papers, here:https://t.co/KsGBWIlNz7 https://t.co/sGw1C7ZpHF
— Giancarlo Van der Velde Potter III (LLC) (@CasPiancey) March 21, 2019
For those who do not remember, the Panama Papers scandal involved 11.5 million documents that were leaked, holding details that would otherwise be protected by financial and attorney-client privilege protocols. There were 214,488 offshore entities whose information was released.
The curious Twitter users continued to search, finding that there were potentially linked between the exchange and BitFinex, which financed ShapeShift, along with missing funds from Ethereum wallets, despite being the only payment option. Only to make matters worse, CipherBlade claimed that the research was performed “pro bono” at the “request” of ShapeShift. However, the fact that Magnan was involved takes some of the credibility out of CipherBlades’s report.
CEO Rich Sanders of CipherBlade has continually said that there is no legitimacy to these rumors, half-joking that there have been conspiracies where he has been
“accused of not existing.”
He added that this rumor put him “into some sort of philosophical crisis,” which was likely to point at the perceived ridiculousness of the claims that he has heard.
A lot of the confusion around these circumstances comes from the role that Magnan appears to have as a “nominee director.” According to Decrypt Media, this position is often someone who is meant to look like they are working a certain position, as a company director, on paper and sometimes at board meetings. However, the actual work they do is non-existent, giving a company a way to hide the true activities.
Presently, Magnan’s employer is AAA International Services Limited, which appears to primarily set up shell companies as a service for bigger companies, though they have other services as well. According to Cas Piancey, Magnan has already served as some kind of front man for 383 companies, which he believes is enough to doubt her work this time as well.
Shell companies are not actually illegal at all. They have many use cases, and one perfect example is to set up a tax haven. Still, the entire role of Magnan appears to be to exist on paperwork, according to CipherBlade analyst Matt Greene. He added that she has
As far as her role at CipherBlade, Greene explained that she shields the team, “based on the nature of the work we do,” since they involve themselves with dangerous clients.
If that is true, it would be more plausible as to why Magnan is the director on multiple allegedly defunct forex brokerages, like Big365 and LMSwiss. Greene explained that her involvement with these companies is not problematic at all, since she has no influence over it either, adding that there are plenty of companies like them that do this for security reasons.
Based on incorporation documents, the owner of CipherBlade appears to be a company from the Marshall Islands under the same name. It is registered in London at an address that it shares with 17 other companies, but it is physically located in Pittsburgh, Pennsylvania if any locals want to double-check this detail.
The link with BitFinex appears to be explainable as well. It is a major investor with ShapeShift, and it shares similarities in its name with a company that Magnan is involved with called Finex. However, there is no other connection, Greene assures.
The other two points – the low wallet holdings and the free report service – can also be easily explained, says Greene. CEO Sanders said that the company has only had two fiat payments ever, which he showed to the investigators at Decrypt Media. While he provided the following image, he couldn’t show that the wallet was under his name.
The free report, Sanders says, was because he felt that the work was a “good cause.” At this point, ShapeShift and Magnan have not been reachable for comments. However, it is worth noting that the former posted a link to the port on their Twitter profile. Requests for comment by Decrypt Media from the Wall Street Journal was also left unanswered.