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Shapeshift CEO Erik Voorhees Under Fire After KYC Introducti...
Industry

Shapeshift CEO Erik Voorhees Under Fire After KYC Introduction To Shapeshift

Users of cryptocurrency exchange desk ShapeShift will no longer be able to trade digital assets without giving away their identity information.

The company has introduced a new loyalty program called “ShapeShift Membership” that will require users to open an account on the exchange and provide their “basic personal details.” While the membership is currently optional, it’ll soon become mandatory for all users.

According to ShapeShift, members will receive “special benefits,” such as “higher trading limits, rewards on trading volume, better pricing, private market and trade data, and early access to new coins, products and services.” But since you’ll soon have no choice but to become a member to use the platform, these don’t seem to warrant the ‘special benefits’ tag.

This is also a significant shift from ShapeShift’s existing business model. Being a “no accounts exchange” has been its unique selling point. Users can trade cryptocurrencies on its platform without having to register or hand over their personal information.

ShapeShift hasn’t specified the reason behind this change, but it’s likely that potential regulatory hurdles are to blame.

Regulations across the globe have become extremely stringent over the years, and cryptocurrency exchange desks are required to comply with know-your-customer (KYC) and anti-money-laundering (AML) laws before letting users trade.

Financial privacy and autonomy have been the most popular features of cryptocurrencies — both with people who support and oppose them. As the industry becomes more mainstream, most cryptocurrency businesses have aligned themselves with the regulators. In fact, ShapeShift is one of the few cryptocurrency exchanges still running that don’t require users to give their personal information.

With this model set to change, it’s hard to see how ShapeShift can survive as a business. Without the “no accounts” advantage, it will definitely find it hard to compete with popular exchange desks like Binance, BitMEX, OKEx, etc. which facilitate billions of dollars in cryptocurrency trades every day.

coinmag

Editor-in-Chief @Coindaily_co and Bitcoin enthusiast

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