|Know Your ShapeShift |
“You either die a hero, or you live long enough to see yourself become the villain.” – Harvey Dent
-Erik Voorhees, CEO of ShapeShift (maybe)
You’re probably wondering why today’s headliner kicked off with a quote (an iconic one, while we’re on the subject) from The Dark Knight. Rightfully so. Let’s provide some context, shall we?
According to Crunchbase, ShapeShift was founded in August 2014 “to provide instant Bitcoin and altcoin conversion with the maximum level of consumer protection and efficiency.”
Emphasis on consumer protections. Circling back to the Batman quote jar, ShapeShift users were effectively born in the darkness:
- No account required
- No fiat deposits necessary
- Zero personal info demanded
By all definitions, ShapeShift was a safe haven for cryptocurrency enthusiasts. And relatedly, a potential black box for money launderers… but we’ll get to that. The point is that ShapeShift had a reputation for upholding a person’s fundamental right to privacy.
That’s why ShapeShift Membership is so contentious
As Erik Voorhees explained, accounts are on the horizon for ShapeShift users. That means their anonymity is officially on notice, and alternative decentralized, anonymous exchanges like (1) CryptoBridge, (2) Xchange.me, and (3) Flyp.me could see more traffic in the coming weeks.
Unsurprisingly, an uproar followed. From accusations of selling out to becoming “a state compliant multicoiner“, Voorhees’ announcement did not sit well with Crypto Twitter’s peanut gallery.
But there’s another reason why ShapeShift just did “it”.
One: Understand that there’s no beating Uncle Sam in the ring – especially when you’re in the business of selling to Americans. Contesting regulations that were undoubtedly inbound wasn’t the right hill for Voorhees to die on.
Besides, let’s be real: Law enforcement will do whatever it takes to monitor crypto transactions. And DEXs aren’t necessarily out of the crosshairs. Unless their team members go the route of Satoshi Nakamoto, regulatory officials can leverage their real world identities to win KYC/AML compliance.
Two: The business pivot is part of a larger vision. Other changes include (1) a cryptocurrency rewards program using FOX tokens – a motive for the ‘sell-out’ jabs – and (2) membership perks, both of which are intended to be long-term value add-ons for the industry.
And their entire product suite has roles to play:
- ShapeShift: Digital asset marketplace
- CoinCap: Real-time market data
- KeepKey: Hardware wallet
- Bitfract: Multi-currency transactions
Sure… it’ll take time for Voorhees’ vision to pan out. But let’s not jump down his throat just yet.