ShapeShift Decentralizes, Removing Need for KYC

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  • ShapeShift has move from a centralized to a decentralized platform, starting immediately
  • Founder Erik Voorhees stated that a fundamental disagreement over the principles of KYC were behind the move
  • Users can still use the platform through decentralized exchanges

ShapeShift, the exchange protocol founded by Erik Voorhees in July 2014, has announced a shift to a decentralized model in protest of increasing oversight. The change, which takes place with immediate effect, will close the platform to individual customers and will instead be implemented within decentralized platforms. This ensures that ShapeShift will no longer need to collect customer information, as it has been legally bound to do since 2018.

Voorhees Decries “Warrantless” Customer Data Collection

Voorhees made the announcement in a blog post yesterday, in which he explained the purpose behind creating ShapeShift – to “pioneer this renaissance of open, self-sovereign finance.” However, Voorhees added that the necessity to “run an advanced surveillance and reporting apparatus” in line with regulations, which began in September 2018, necessitated the “warrantless collection and surveillance of personal, private information of innocent individuals.”

As a way of getting around the necessity of asking users to submit their personal information while also sticking to ShapeShift’s founding principles, Voorhees announced that the platform will be closed to customers and will instead be embedded within decentralized projects. 

ShapeShift Ready for Decentralized World

Decentralized finance, he says, are “simply safer, more efficient, more transparent, and provides a better user experience”, adding that the time is finally right to make the move:

Why didn’t ShapeShift do this in 2018? Decentralized trading protocols were not sufficiently viable two to three years ago. But, they are viable today. The rise of decentralized exchanges in particular this year has been truly inspiring…instead of resisting such beautiful innovation, we will embrace it to better serve our customers.

ShapeShift’s new enterprise will begin by working with decentralized protocols that only support Ethereum and ERC20 assets, but Voorhees said that he expected “native, non-wrapped Bitcoin and several other leading chains” to be supported in the first quarter of this year.