ShapeShift Will Now Require “Basic Personal Details” for New Membership Program
The digital asset platform plans to make AML/KYC mandatory for all later this year.
In a what appears to be a seismic shift in company ethos, digital assets platform ShapeShift has launched a new loyalty program called "ShapeShift Membership" which will require the exchange users to provide "basic personal details," according to a blog post published September 4, 2018.
In his post, ShapeShift Founder and CEO Erik Voorhees said that the membership is part of a “loyalty program" that will see the platform collect personal information from its users while rewarding them with a range of benefits, including higher trading limits, cheaper fees, early access to new coins and more.
While ShapeShift has long been known as "the exchange without accounts," with a model established to "reduce friction and protect customers," this pivot seems to move away from the hands-off ideals that have distinguished it from other cryptocurrency exchanges.
Voorhees said the change was influenced by three key factors, namely, user requests, an increasing interest in tokenization and regulatory hurdles, the latter of which, the founder claims, requires the exchange to be "prudent and thoughtful" in its approach.
Regulatory authorities across the world have become firm with exchanges, as most countries now require digital asset platforms to comply with know-your-customer (KYC) and anti-money laundering (AML) laws before operating in the region.
On the issue of privacy, Voorhees said his exchange still believes in the "right to financial privacy," which he believes is a "foundational element of a civil and just society."
"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."
The membership program is currently optional, but there are plans to make it mandatory later this year. ShapeShift has set the wheels in motion to become an account-based exchange, but Voorhees assures users the firm has no plan to change its "non-custodial model," meaning customers will still have direct control and ownership over their funds.
As ShapeShift’s concessions demonstrate, financial privacy, a long-standing tenet for the crypto community, is gradually being eroded as platforms are forced to play it safe by aligning with regulators.
Andreas Antonopoulos, regarded by many as one of the industry's leading thinkers and writers, commented on the news on Twitter:
Very disappointed that @ShapeShift_io is implementing KYC.— Andreas M. Antonopoulos (@aantonop) September 5, 2018
Just goes to show that any centralized entity will be pushed in that direction, which is why LN, atomic swaps and Decentralized Exchanges are the only way to resist surveillance economics.