UPDATED | September 28, 2018
ShapeShift announced via Twitter today that starting Monday, October 1, membership will be required for users to continue using the exchange's services.
ORIGINAL | September 4, 2018
In a September 4 ShapeShift post, CEO Erik Voorhees released details about the exchange's new membership offering, which he described as "an advanced loyalty program." There are five membership levels, with the first level free and available to all users. The remaining four will be released in the future. Although membership is currently optional, Voorhees said it would later be mandatory for consumers wanting to continue using the exchange's services.
Membership may come with bells and whistles not available to users before, such as higher trading limits, rewards on trading volume, and better pricing, but to establish these membership accounts, the company must solicit personal information to adhere to KYC and AML laws. Historically known as "the exchange without accounts," ShapeShift has attracted many individuals with its privacy-centered system. With the no-account model out the window, that luster is gone.
Voorhees conceded that the collection of personal information "sucks," though he continued to say that the company "still firmly believe[s] that individuals, regardless of their race, religion, or nationality, deserve the right to financial privacy" and that ShapeShift remains "committed to that cause." Followers on Twitter, though, argue that news of the membership program spells death for the platform:
One Twitter follower argued that the move runs counter to ShapeShift's stated credo:
Although the "RIP ShapeShift" sentiment may appear hyperbolic, it brings attention to the exchange's motivations. Voorhees himself broached the topic of the platform's foundation and history of financial privacy, noting that the announcement of the membership program seemed to be "a curious development" for the company. Why, then, would an exchange that has amassed a sizable following through its no-account system want to ditch that mindset? Why would Voorhees be okay with that?
Apparently, three themes informed the switch to a membership model: user requests for account-related features like transaction histories and email notifications, the company's increased interest in the concept of tokenization, and the broader regulatory environment. The team, according to Voorhees, has "been exploring and considering" these topics for at least the past year.
In a world run by centralized authorities, it makes sense to comply with Big Brother's regulatory guidelines to play it safe in the cryptospace, so to speak. Even if ShapeShift is "selling out," as some Twitter users believe, the company may be making a smart move to affect financial privacy change from within the existing system. Fans and followers of the exchange may be upset, but the move is admittedly tactical, for better or for worse.