Posts by BitcoinCowboy

    Chilean Taxpayers Must Report Cryptocurrency Profits to Chilean IRS: Local Media


    Chilean taxpayers must report their cryptocurrency profits to the Chilean Internal Revenue Service (SII), Spanish crypto media Diario Bitcoin reports on Jan. 17.

    The SII reportedly decreed in 2018 that digital currencies weren’t subject to Value Added Tax (VAT), but should still be considered when calculating annual income tax, as they fall into the definition of intangible assets.

    Because of this consideration, the dedicated income tax form 22 will reportedly include — for the first time — a special section dedicated to “other own and/or third-party income from companies that declare their effective income and do not declare it to full accounting, attributed...”

    DiarioBitcoin reports that, while it is not explicitly stated in the form, an SII statement released at the end of 2018 noted that taxpayers should report their income from the sale of foreign fiat currencies and cryptocurrencies in the aforementioned section.

    As Cointelegraph reported at the beginning of the current month, the Chilean anti-monopoly court has again granted protection to local cryptocurrency exchanges by forcing banks to keep their accounts open.

    In April 2018, news broke that Chilean cryptocurrency exchanges BUDA, Orionx and CryptoMarket (CryptoMKT) had applied to an appeals court to confront the banks that shut down their platforms’ accounts.


    Bitcoin Falls Towards $3,550 as Top Cryptos See Moderate to Major Losses


    Sunday, Jan. 20 — all the top 20 cryptocurrencies are seeing moderate to major losses in the 24 hours to press time. Bitcoin’s (BTC) price is nearing $3,550 again, according to Coin360 data.

    Market visualization

    Market visualization from Coin360

    At press time, Bitcoin is down over 4 percent on the day, trading at around $3,587. Looking at its weekly chart, the current price is lower than $3,673, the price of Bitcoin on last Sunday.

    Bitcoin 7-day price chart

    Bitcoin 7-day price chart. Source: CoinMarketCap

    Ripple (XRP) is down over 3 percent on the day, trading at around $0.321 at press time. On the weekly chart, the current price is lower than $0.332, the price at which XRP started the week — and also lower than $0.337, the midweek high reported on Jan. 14.

    Ripple 7-day price chart

    Ripple 7-day price chart. Source: CoinMarketCap

    Ethereum (ETH) has seen its value decrease by over 4 percent over the last 24 hours. At press time, ETH is trading at almost $119, having started the day around $125. On the weekly chart, Ethereum’s current value is lower than $125, the price of the coin seven days ago.

    Ethereum 7-day price chart

    Ethereum 7-day price chart. Source: CoinMarketCap

    Among the top 20 cryptocurrencies, the ones experiencing the most notable losses on the day are IOTA (down almost 7 percent), NEO, Cardano and Bitcoin Cash (BCH) (all down over 6 percent.)

    The combined market capitalization of all cryptocurrencies — currently equivalent to about $119.7 billion — is lower than $122.5 billion, the value it reported one week ago.

    Total crypto market cap 7-day chart

    Total crypto market cap 7-day chart. Source: CoinMarketCap

    As Cointelegraph recently reported, a bill meant to clarify the classification of cryptocurrencies has been introduced in the U.S. state of Wyoming on Jan. 18.

    Also, news recently broke that Wyoming has passed two new house bills that aim to foster a regulatory environment conducive to cryptocurrency and blockchain innovation.


    United Arab Emirates and Saudi Arabia Collaborate on New Cryptocurrency


    The United Arab Emirates (UAE) and Saudi Arabia have announced an agreement to cooperate on the creation of a cryptocurrency, UAE official news agency Emirate News Agency reports on Jan. 19.

    According to the report, the Executive Committee of the Saudi-Emirati Coordination Council has held a meeting in UAE capital Abu Dhabi, with 16 members in total from both countries, in order to discuss the join initiatives in the Strategy of Resolve.

    The Strategy of Resolve is comprised of seven initiatives, including civil aviation, financial awareness youth training, and the development of a cross-border digital currency. According to the article, the cryptocurrency “will be strictly targeted for banks at an experimental phase with the aim of better understanding the implications of blockchain technology and facilitating cross-border payments.”

    The joint cryptocurrency project will also research the effect of a central currency on financial policies.

    The initiative reportedly seeks to protect customer interest, create standards for technology, and consider the cybersecurity risks while determining the impact of central currencies on monetary policies, Emirate News Agency reports.

    Cointelegraph reported in December last year that the United Arab Emirates’ central bank was collaborating with the Saudi Arabian Monetary Authority to issue a cryptocurrency accepted in cross-border transactions between the two countries.

    During the same month, Cointelegraph reported that the United Arab Emirates is looking to join the list of leading destinations for blockchain-related businesses in 2019 due to its new crypto legislation.


    Bitcoin, Ripple, Ethereum, Bitcoin Cash, EOS, Stellar, Litecoin, TRON, Bitcoin SV, Cardano: Price Analysis, Jan. 18


    The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.

    The market data is provided by the HitBTC exchange.

    In a recent interview with Cointelegraph, Sterling Witzke, partner at Winklevoss Capital, claimed that institutional investors are looking into the cryptocurrency industry, but are not quite ready to take the big plunge yet.

    According to her, the unfavorable regulatory environment in the United States and the lack of adequate security measures in are two major factors that need to be sorted out if institutions are to make a decisive entry.

    Companies are trying various approaches to opening up Bitcoin and other cryptocurrencies to the mainstream audience.

    One such attempt is by Bitcoin ATM company Coinme that has partnered with coins-to-cash converter Coinstar. The two companies aim to facilitate buying Bitcoin through Coinstar kiosks that are going to be put up at grocery stores throughout various countries.

    As if the number of existing cryptocurrencies was not enough, researchers from seven top U.S. Universities have come together to launch a “globally scalable decentralized payments network.” This shows that some of the top minds in the industry are positive on the prospects of cryptocurrencies in the future.


    Bitcoin’s (BTC) volatility has declined sharply in the past three days. We anticipate a resolution of this tight range within the next few days. Both moving averages are either flat or marginally sloping down. The RSI is in the negative zone. This shows that the path of least resistance is to the downside.


    A breakdown of $3,473.47 can push the BTC/USD pair towards the year-to-date low of $3,236.09. On the contrary, if the bulls push the price above the moving averages, a rally to $4,000 is possible. We anticipate a strong resistance in the zone of $4,000–$4,255.

    If the bulls scale this zone, the leading cryptocurrency might start a new uptrend. We shall wait for a reliable buy setup to form before recommending any trades in it. Until then, it is best to remain on the sidelines.


    The failure of Ripple (XRP) to break out of the moving averages will attract sellers. A breakdown of $0.31121 can lead to a decline to $0.27795.


    The trend is down as the XRP/USD pair continues to trade inside the descending channel. Both of the moving averages have turned down marginally and the RSI is in the negative zone, which suggests that the bears have the upper hand.

    The first sign of a probable trend reversal will be a breakout and close above the downtrend line. Such a move can see the price move to $0.4, and above it to the resistance line of the channel. We couldn’t find a reliable trade setup at the current levels, so we are not suggesting any new long positions.


    Though the bulls have successfully defended the 50-day SMA for the past four days, they haven’t been able to push Ethereum (ETH) above the 20-day EMA.


    The 20-day EMA sloping down and the RSI in the negative zone suggest that the bears have the advantage in the short term. A breakdown of $116.3 will increase the probability of a fall to $100, and further to $83.

    However, if the bulls push the price higher, a breakout above $140 can carry the ETH/USD pair towards the next overhead resistance of $167.32. We shall wait for a confirmed change in trend before proposing a trade in it.


    The volatility in Bitcoin Cash (BCH) has shrunk dramatically in the past three days, which shows a lack of both buying and selling interest.


    If the buyers return in large numbers and push the BCH/USD pair above the moving averages, a rally to $177.3 will be probable.

    Nonetheless, if the bears sink the digital currency below $121.3, a decline to $100, and below that to $73.5, will be possible.


    Though EOS continues to trade inside the range of $2.3093–$3.2081, the bulls are struggling to push the price above the 20-day EMA.


    A breakdown of the range and $2.1733 can push the EOS/USD pair towards $1.7746, and below that to the recent low of $1.55.

    Conversely, if the bulls push the price above the 20-day EMA, the cryptocurrency might reach the top of the range. With both of the moving averages flat and the RSI marginally in the negative zone, a consolidation is likely.


    The intraday range has tightened further in Stellar (XLM). The bulls and the bears are in a state of balance.


    A break below $0.010235190 will increase the probability of a retest of $0.09285498, below which the downtrend will resume.

    If the bulls push the XLM/USD pair above the 20-day EMA and the 50-day SMA, a move to $0.13427050 will be possible. A break out of this level will be the first indication that the trend is about to reverse. Currently, we couldn’t find any bullish patterns, so we are not suggesting a trade.


    Litecoin (LTC) has been trading between the moving averages for the past four days. Such a tight range is unlikely to sustain for a long time.


    After this period of low volatility, we expect the range to expand in the next few days. However, it is difficult to predict which way the break will happen because the moving averages are flat and the RSI is also just below the 50 levels.

    If the LTC/USD pair scales above the 20-day EMA, it might attempt to move up to $36.428, and further to $40.784. However, if the bears sink the virtual currency below the support zone of $27.701–$29.349, a fall to $23.090 will be probable. Therefore, long positions should be protected with a stop loss at $27.5.


    For the past two days, Tron (TRX) has been trading inside the intraday high and low formed on Jan. 15 of this year.


    A breakout and close above the overhead resistance zone of $0.02733572–$0.02815521 might start a new uptrend that could carry the TRX/USD pair to $0.04.

    On the other hand, if the price breaks down of the 20-day EMA, it might correct to $0.0211344, and below it to $0.0183. We suggest traders either buy closer to $0.0183, or on a close above $0.02815521 (UTC time frame). We couldn’t find any reliable trades inside the range.


    Not much is happening in Bitcoin SV (BSV) as it remains stuck inside a very tight range of $74.022–$88.722.


    A breakdown of this tight range will lead to a retest of $65.031. A break of this level will trigger the liquidation of long positions that can plunge the BSV/USD pair further to $57, and below that to $38.528.

    The first sign of recovery will be when the bulls push the price above the moving averages and sustain it there. Until then, we suggest the traders stay on the sidelines.


    Though Cardano (ADA) has closed above the 20-day EMA, it is yet to make a decisive move higher. Currently, the bulls are struggling to sustain above the moving average.


    Both moving averages are flat, and the RSI is close to 50 levels, which points to a consolidation in the near term.

    The levels to watch on the downside are $0.4 and $0.036815, whereas an important threshold on the upside is $0.051468. If this level is crossed, the ADA/USD pair can move up to the resistance line of the ascending channel.

    However, we couldn’t find any bullish setups at the current levels, so we remain neutral on the coin.

    The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.


    Linux-Targeting Cryptojacking Malware Disables Cloud-Based Security Measures: Report


    A new cryptojacking malware has the ability to disable cloud-based security measures to avoid detection on Linux servers, research by information security company Palo Alto Networks Jan. 17 reveals.

    The malware in question mines Monero (XMR) and is reportedly a modified version of one used by the so-called “Rocke” group, originally discovered by cybersecurity firm Talos in August last year. According to the research, one of the first things that the malware does is check for other cryptocurrency mining processes and add firewall rules to block any other cryptojacking malware.

    The virus reportedly also searches for cloud security services by Chinese internet giants Tencent and Alibaba and neutralizes them in an attempt to remain concealed. Ryan Olson, vice president for threat intelligence at Palo Alto Networks explained:

    “This evolution indicates that attackers who are compromising hosts operating in cloud platforms are now attempting to evade security products that are specific to those platforms.”

    The virus also reportedly takes advantage of known vulnerabilities in older versions of Apache Struts 2, Oracle WebLogic and Adobe ColdFusion to infect the systems. Still, keeping the software updated to the latest version prevents the attack, according to the report.

    As Cointelegraph reported in December last year, cryptojacking malware activity rose by over 4000 percent in 2018, according to a new quarterly report published by cybersecurity firm McAfee Labs.

    According to another report published the same month, 415,000 MikroTik routers had been affected by cryptojacking malware at that time, double the number of infected devices since last summer.


    Blockchain Featured in Big Four Firm Deloitte's Annual Tech Trends Report


    Blockchain is featured as a disrupting technology in the Tech Trends 2019 report published by Big Four audit and consulting firm Deloitte on Jan. 16.

    According to one article in the report, “[a]dvanced networking is the unsung hero of our digital future,” and blockchain is cited as a part of it. The report — which mentions blockchain 25 times — notes that blockchain is among the technologies the importance of which is growing rapidly and still on its path towards mass adoption.

    The report also cites a International Data Corporation’s (IDC) projection from last year that states worldwide spending on blockchain solutions will reach $9.7 billion in 2021. Another IDC’s prediction sees the spending hitting $11.7 billion in 2022.

    The annual report also notes that the fact that blockchain is “capturing both mindshare and investment is remarkable considering that a few years ago the word blockchain was known only through its relationship to cryptocurrencies.” The authors explain their take on the nature and implications of blockchain:

    “Today, blockchain is to trust what the web was to communication: a profoundly disruptive technology that transforms not only business but the way humans transact and engage.”

    Deloitte’s report forecasts ares in which blockchain is likely to develop this coming year, saying “we will likely see breakthroughs in gateways, integration layers and common standards in the next few years.” For cryptocurrency applications, the researchers expect proof-of-stake (PoS) algorithms — a less computing intensive way to verify transaction that does not rely on mining — to address scalability and transaction cost problems.

    As Cointelegraph reported in October last year, Deloitte has outlined five basic areas in which blockchain technology needs to develop in order to achieve widespread adoption.

    The five obstacles cited to the adoption of the technology are the possibility of time-consuming operations, lack of standardization, high costs and complexity blockchain applications, regulatory uncertainty, as well as the absence of collaboration between blockchain-related firms.

    Deloitte’s point of view is apparently in contrast with the ideas of major financial consulting company McKinsey & Company which — as Cointelegraph recently reported — believes that there is little evidence of practical use cases for blockchain.


    Malaysia Develops Harsh Regulation Alongside With Positives Attitudes Toward Crypto


    Cryptocurrency exchanges and blockchain-based companies in Malaysia face some testing times following regulatory changes in the country. As of Tuesday, Jan. 15, new regulations governing cryptocurrencies have come into effect in Malaysia.

    According to reports, the new regulation has classified cryptocurrencies, tokens and crypto assets as securities, which means they are now under the jurisdiction of the Malaysian Securities Commission.

    In accordance with the change, any unauthorized cryptocurrency exchanges or initial coin offering (ICO) could face a 10-year jail sentence and fines to the tune of $2.4 million.

    Malaysia / Law in progress

    While the change may seem harsh at face value, the punishments for those not adhering to regulations are just the worst-case scenario.

    According to various sources, the Malaysian government has expressed positive sentiments toward cryptocurrencies and blockchain technology, even though they’ve taken a hard line in classifying all cryptocurrencies as securities.

    Malaysia’s positive outlook, despite blanket treatment

    Malaysian news outlet The Star noted the positive attitude toward the sector, as Finance Minister Lim Guan Eng delivered the enforcement of the new regulations. According to Eng, the Malaysian government sees the potential of cryptocurrencies and blockchain technology to improve a number of sectors of its economy:

    “The Ministry of Finance views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries. In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors.”

    This change in sentiment has come swiftly, considering that a Malaysian government minister had said the government was still undecided in its stance on cryptocurrencies last week.

    Federal Territories Minister Khalid Abdul Samad made this statement on Jan. 12, according to New Strait Times:

    “People have asked me if these (cryptocurrency and digital currency) currencies are legal or illegal. At the moment, the answer is neither legal nor illegal as the situation is still unclear.”

    Nevertheless, the final outcome has met the timeline set out by the Malaysian government back in 2018. In December, the finance regulator and central bank had earmarked a final decision on regulation for the first quarter of 2019.

    Effendy Zulkifly, who founded Crypto Valley Malaysia, told Cointelegraph that there was already a high level of awareness at a governmental level in the country, with the Central Bank of Malaysia creating a fintech sandbox and setting up a cryptocurrency unit.

    Zulkifly believes the move is a positive one for businesses operating in the cryptocurrency space within Malaysia, as it removes any uncertainty around the legality of their operations:

    “It is a good thing for the cryptocurrency market because we can [sic] a clear direction and are now recognised by government. There’s no need to be scared and no need to hide anymore. We can just follow the requirements by the government and do an ICO without fear anymore. For example, the Switzerland government is a model that recognised ICOs in their country. Their economy got stronger because the value of ICOs as Foreign Direct Investment.”

    Harapan Coin

    While the Malaysian government has been contemplating the direction to take with cryptocurrencies, there’s been plenty of controversy around a local cryptocurrency project linked to a political party.

    As previously reported by Cointelegraph, the Harapan Coin came into existence in 2017 and has since been touted as a cryptocurrency used for funding a coalition of opposition political parties leading up to the country’s 2018 elections.

    The Barisan Nasional had been in control of the country since its independence in 1957, but finally conceded power in 2018, when the Pakatan Harapan coalition took a majority of seats in the lower parliament.

    Overcoming the lengthy stay of power was used as a major fighting point by opposing parties, and the Harapan Coin was directly linked to funding these opposition parties.

    There has been some controversy surrounding this particular aspect of the project. The identities of people working on the project are obscure, and more than half of the funds raised has been allocated to system administrators and one of the political parties within the Pakatan coalition.

    The Harapan Coin has been promoted by Khalid Samad, the Malaysian Minister of Federal Territories mentioned above. Overall, the project seemed to have been held at arm's length by the Malaysian financial authorities and civil society groups.

    A blanket approach

    The Malaysian government and financial regulator have made a clear-cut decision to define cryptocurrencies as securities. The decision may have some interesting ramifications, but it's a decision that gives clarity to businesses operating in the country.

    It is, however, a very different approach compared to a country like the United States, which has taken an extended amount of time to consider how it should regulate cryptocurrencies and virtual assets.

    Regulations governing securities have been applied to cryptocurrencies around the world in order to provide some sort of guideline to a technology and medium of exchange that is still in its infancy.

    With that being said, the U.S. is looking to move in a different direction from the one taken by Malaysia. In December 2018, two U.S. congressman introduced a draft bill that hopes to exclude digital assets from being defined as securities.

    United States / Law in progress

    The bill wants the Securities and Exchange Commission (SEC) to adjust taxes related to virtual currencies, create a tax exemption for the exchange of different cryptocurrency tokens, as well as a change to the taxation of capital gains made on the sale and exchange of cryptocurrencies. The proposal essentially wants cryptocurrencies to be considered for what they are, and regulated in a manner that is fair to their use cases.

    A prime example was the consideration of Ethereum as security, due to the nature of its token sale in 2014. American regulators looked long and hard at the situation before a final decision was taken to not consider Ethereum as a security in June 2018.

    However, the simple truth is that Malaysia’s take effectively throws a blanket over all cryptocurrencies, ICO’s and their tokens. For now, exchanges and blockchain companies will have to play by the rules or suffer the consequences laid out by Malaysian regulators this week.

    The ideal situation

    While a blanket approach seems to be the route Malaysian regulators have taken, it may not be the best way to approach the situation.

    Cointelegraph reached out to Dr. Mattia Rattaggi, the chair of policy and regulation at the Crypto Valley Association, who provided a holistic view of global regulatory trends toward cryptocurrencies:

    “As we know, the definition of securities differs from country / region to country / region. I am not familiar with the securities law in Malaysia, but the same principle should apply.”

    As Rattaggi suggests, there seems to be no clarity on whether clear distinctions will be made between different types of securities and how cryptocurrencies and crypto assets will be individually classified.

    “They seem to take the view that all cryptotokens are securities. But I do not know if they draw distinctions between payment, utility and securities tokens. Thus, in my view only cryptotokens that correspond to securities according the financial law prevailing in the country should be considered and regulated as securities.”

    Nevertheless, regulation continues to be a major talking point around cryptocurrencies. Some feel this is a hindrance, but Rattaggi believes it is pertinent to ensure growth and development of the industry:

    “I hold the view that the crypto economy is still in a phase where it needs more regulation rather than less. More regulation is needed to increase trust, to standardize more, and more importantly to get to the maturity level of interest to institutional money and investors.”


    OECD: ICOs Have Business Financing Benefits But Aren't a Mainstream Option


    The Organization for Economic Cooperation and Development (OECD) thinks initial coin offerings (ICOs) may become a useful financing tool for small and medium-sized businesses (SMEs) – but the space is not yet mature or regulated enough for the “mainstream.”

    The report, published Tuesday by the international economic organization, provides a broad overview of ICOs and different token distribution methods, including airdrops, and examines how tokens built on top of distributed ledgers (DLT) may be used to raise funding for these smaller companies.

    The report notes that it does not explore token taxonomy or regulatory efforts, given that such efforts are ongoing. Further, the authors say the report “is based on the theoretical discourse of token offering and is not intended as a practical ICO guide.”

    While ICOs may be helpful in raising funds, the general immaturity of the space means it may be difficult to properly assess the value of tokens for companies, it goes on. This in turn could impact how much funding firms would be able to raise.

    The report adds:

    “Although ICOs are being hailed as the solution to SME financing gaps, ICOs are, by nature, not the right solution for every project and a differentiation should be made between blockchain-enabled projects or products/services, and business or products/services not built on DLTs, as the former has a higher potential of benefiting from an ICO.”

    Further, the OECD argues that ongoing regulatory uncertainties mean companies may not want to trust the use of tokens in fundraising.

    Even beyond a lack of clarity on how regulators in different jurisdiction might treat cryptocurrencies and tokens, the fact that ICOs represent “early stage” financing means that there is an added risk to investors, particularly those who may not understand what exactly they would be purchasing in a token sale.

    As a result, the report says, any potential for ICOs to act as “a mainstream financing option” is limited,

    “It therefore seems inappropriate to consider ICOs as a potential ‘mainstream’ financing mechanism for SMEs whose projects are not enabled by DLTs and which would not benefit from network effects,” it notes.

    OECD image via Shutterstock


    Chip Making Giant TSMC Reports Significant Drop in Crypto Mining Revenue


    Chip manufacturing giant Taiwan Semiconductor Manufacturing (TSMC) reported a sizeable drop in its crypto mining-related revenue in 2018. The news was revealed in the company’s Q4 2018 financial results, published Jan. 17, together with an earnings call transcript.

    TSMC has not disclosed specific data for its crypto mining business — including it instead within its high-performance computing (HPC) segment. In the earnings call transcript, TSMC CEO & Vice Chairman C.C. Wei revealed that whereas HPC, excluding crypto, had grown slightly:

    “[C]ryptocurrency is a big drop from 2018 to 2019. So if we put the cryptocurrency together in the HPC, it's a big drop. It's almost a double-digit.”

    Pressed to give more exact data, Wei only noted that cryptocurrency had contributed a lot to the manufacturer’s chip sales last year, yet emphasized the firm “cannot specify too much of the segment, particularly it belongs to one of the big customers.”

    As reported, TSMC is known as a major supplier of Application-Specific Integrated Circuit (ASIC) chips to Chinese crypto mining behemoth Bitmain, which has been under increasing pressure during the persistent cryptocurrency bear market slump.

    While a Bernstein analysis had attributed 2 to 3 percent of TSMC’s total revenue to cryptocurrency-related sales in February last year, Wei looked ahead to 2019 with considerably more circumspection:

    “Okay. This year, we don't forecast — we become conservative in forecasting this volatile business. So the cryptocurrency mining this year is much, much less than last year. And to what percentage, I don't think it's — I can release it right now.”

    For Q4 2018 on a consolidated basis across its business, TSMC posted a revenue of $9.4 billion in Q4 2018 — a 10.7 percent increase from the previous quarter and a 2 percent rise year-over-year, according to the report. Lora Ho, chief financial officer and senior vice president of finance, stated that Q1 2019 revenue is forecast to be $7.3-$7.4 billion — representing a 22 percent sequential decline.

    As reported just this week, the bearish market continues to impact mining industry participants. Major United States-based crypto mining and blockchain firm Giga Watt has just announced it is closing access and power to its facilities and stopping day-to-day operations, after having filed for bankruptcy in November last year.

    Bitmain continues to wind back its multinational operations, this month reportedly suspending its mining in the U.S. state of Texas, after having closed its development center in Israel and laying off local employees at the end of last year.


    Law Enforcement Requests to Shapeshift Rose 175% in Second Half of 2018


    Law enforcement requests sent to Switzerland-based cryptocurrency exchange ShapeShift rose 175 percent in the second half of 2018, according to a new Compliance Transparency report published by the exchange Jan. 18.

    In a blog post accompanying the report, Shapeshift outlines that it typically receives requests from law enforcement agencies for data including crypto addresses (in or out of the Shapeshift system), transaction IDs, identity information (names, emails, IP addresses), cryptocurrency or crypto asset information and more. ShapeShift emphasizes that in most cases it is not informed of the details of the investigation or probe for which the data is being gathered.

    The report reveals that Shapeshift received a total of 44 subpoena requests in Q3 and Q4 2018 — a 175 percent increase as compared with a combined total of 16 in the preceding two quarters. These break down as 6 subpoenas in Q1, 10 in Q2, 19 in Q3 and 25 in Q4.

    2018 law enforcement requests sent to ShapeShift. Source for data: ShapeShift

    In terms of geographic jurisdictions, the highest number of requests over the year came from United States-based agencies — accounting for 18 out of a total of 60 global inquiries. Among these, 6 came from the FBI, 5 from the Securities and Exchange Commission (SEC), 3 from state level authorities, 2 from the Department of Homeland Security (DHS) and 1 from the Commodities and Futures Trading Commission (CFTC).

    German agencies accounted for the second-highest number of inquiries by country — issuing 8 requests — followed by the United Kingdom, with 6, and France, with 4.

    ShapeShift claims it is usually able to provide the requested information within a 1-2 week time frame, and that it complied with every verified request it received in 2018. As the exchange notes, the uptick in its law enforcement inquiries over the year correlates with that seen by other exchanges. As previously reported, subpoenas to crypto exchange Kraken increased three-fold in 2018, as compared with the preceding year.

    ShapeShift’s blog post takes pains to emphasize that its experience with law enforcement is typical, citing TechCrunch founder Michael Arrington’s statement when his $100 million crypto hedge fund was probed by the SEC in March 2018: “We received a subpoena. Every [crypto] fund I’ve talked to has received one…”

    As reported last fall, ShapeShift was prompted to refute allegations of facilitating money laundering, after being implicated in a Wall Street Journal report that claimed $9 million in ill-gotten funds had been funnelled through its platform.

    As a non-custodial platform, Shapeshift historically did not impose user identification requirements on traders — although this is now changing since the platform began to evolve a mandatory membership model in September.