ShapeShift Will No Longer Be Anonymous

ShapeShift Will No Longer Be Anonymous

The Founder and CEO of ShapeShift, Erik Voorhees, has announced that the exchange is launching a membership program and soon, anonymous trading will not be available.

For years, ShapeShift has been an easy way for cryptocurrency users to convert cryptocurrency into other types of cryptocurrency. The process is efficient and completely anonymous, up to now at least. The reason it was able to offer anonymous transactions is because it only offered crypto to crypto, with no fiat options.  Generally, in the past, customer information was only required for fiat to crypto transactions.

Cryptocurrency transactions are intrinsically immutable, meaning they can’t be reversed, so customer information is not needed by ShapeShift to prevent chargebacks. However, regulations on crypto exchanges have been increasing, and now apparently even crypto to crypto exchanges like ShapeShift have to collect know your customer (KYC) data to avoid getting in trouble with the government.

Collecting KYC data can help prevent money laundering, but simultaneously crypto users typically dislike their data being collected. This defeats one of the purposes of crypto, which is to be private and outside of government control. Many will feel that data collected on ShapeShift could be used later to open tax cases against customers.

It is likely that numerous crypto users will stop using ShapeShift due to this new KYC policy. Already BTCPay, a Bitcoin payment service, has said it is done using ShapeShift due to this policy change.

Aside from announcing the end of anonymity, ShapeShift has announced a membership program. It will be a tiered membership program where level 1 is free but for levels 2 through 5, increasing amounts of FOX coin must be held. FOX is a new Ethereum token that will be launched by ShapeShift soon.

 

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Image Courtesy: Pixabay

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