ShapeShift To Abandon No-Account Model

ShapeShift To Abandon No-Account Model

ShapeShift launches a membership program. Optional for now, the program will soon become mandatory for all users. The community is vocal

Shapeshift, a Swiss-based cryptocurrency exchange, is abandoning its no-account policy in favor of a loyalty program. This means that users will have to create accounts and therefore provide personal information.

According to a blog post by CEO of Shapeshift Erik Voorhees, the three key reasons for this decision are:

  • growing demand for account-related features;
  • Shapeshift’s interest in tokenization; and
  • need for a prudent approach in navigating regulatory environment.

The membership includes such benefits as:

  • discounts on exchange rates;
  • volume-based rewards in FOX; and
  • higher transaction limits.

FOX tokens are standard Ethereum-based tokens. Upon signing up, a user is granted a Level 1 membership. Users progress further up to Level 5 and unlock new features by increasing FOX holdings.

After pointing out the fact that all members will need to provide basic personal information, Voorhees says,

Yes, that last detail sucks. We would prefer if the collection of personal information was not a mandatory element. We still firmly believe that individuals, regardless of their race, religion, or nationality, deserve the right to financial privacy, just as they deserve the right to privacy in their thoughts, in their relationships, and in their communications. Such privacy is a foundational element of a civil and just society, and should be defended by all good people. We remain committed to that cause and it is best served if we are smart about our approach

Erik Voorhees, founder and CEO of Shapeshift

Community’s reaction

In the past Shapeshift was spoken well of amongst the crypto community for the exchange’s reluctance to comply with regulatory requirements. With its yesterday’s decision, the exchange seems to have deprived itself of the community’s credibility. And the reaction was not long in coming.

Jon Matonis, the Founding Director at Bitcoin Foundation, is not likely to using the exchange’s services,

Peter Todd, an applied cryptography consultant, is not too optimistic about Shapeshift’s future either,

To Vijay Boyapati the news was a reminder of his disappointment with Erik Voorhees after the 2X incident,

Twitter user @dandarkpill suggests that the exchange slightly changes its URL,  

About ShapeShift integration

In response to @tomzarebczan’s tweet wondering about how the introduction of the loyalty program will affect services such as Coinomi Wallet that use Shapeshift API, the exchange replies,

BTCPay Server, a cryptocurrency payment processor, does not support Shapeshift any more,

Other Shapeshift-integrated payment processors such as BitPay have not yet spoken out on this matter.

With the mandatory membership program introduced, Shapeshift will join the ranks of KYC’d exchanges, including Coinbase, Kraken, Bitfinex, OKEx, and Binance.

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