ShapeShift’s Voorhees on Vexed KYC Push: “Not Something We Want To Do”
Feeling the need to clarify various aspects of the ShapeShift announcement that prompted much opinionated discourse in the crypto world yesterday, Erik Voorhees (CEO & Founder, ShapeShift) has taken to Twitter to provide additional commentary.
In a Thursday tweet shared by Voorhees’ account (i.e., @ErikVoorhees) at 4:17am (CET), he remarked that the admittedly “heavy decision” to impose mandatory Know Your Customer (KYC) requirements was made so as “to derisk under duress;” an acknowledgement of the ever-changing regulatory uncertainty that continues to hamper any would-be development in the cryptoasset market, particularly with regards to financial involvement from institutional investors and family offices.
In line with yesterday’s post – whereby Voorhees disclosed that it “sucks” to be enforcing the intrusive requirement – the early cryptocurrency adopter tweeted that KYC “is not something [that ShapeShift] wants to do, nor something any user wants.” The membership program and FOX token, however, were conceived by ShapeShift autonomously, according to Voorhees.
To clarify, the Membership program and the FOX token are systems we wanted to build for our users. The imposition of mandatory KYC within that Membership program is not something we want to do, nor something any user wants. It’s a heavy decision done to derisk under duress.
— Erik Voorhees (@ErikVoorhees) September 6, 2018
Wait, What Happened?
For those unaware, ShapeShift – the popular Zug-based instant exchange for digital assets such as Bitcoin (BTC) – yesterday unveiled a rewards program, one that will progressively evolve into a mandatory membership model for all ShapeShift users.
Why so controversial? Well, over the past several years, ShapeShift has managed to surge in popularity (partly) because crypto buyers and sellers were assured relative privacy amid an industry where regulators were continuing to clamp down on cryptocurrency exchanges with regards to KYC and Anti-Money Laundering (AML) compliance.
With the LocalBitcoins peer-to-peer trading platform being one of the last such entities to buckle to regulatory pressure earlier in the year – when they started requiring KYC/AML information from the relatively high-volume customers – some would argue that it was only a matter of time before ShapeShift, too, would start demanding such personal information from its customers.
Unsurprisingly, certain members of the crypto ecosystem voiced their discontent with Voorhees and his ShapeShift juggernaut, which has acquired and/or built out multiple facets of its business in recent years, including CoinCap (real-time market data and information), Prism (the world’s first trustless portfolio market platform), KeepKey (a bitcoin hardware wallet startup), and Bitfract (a project building a one-to-many bitcoin exchange tool).