Cryptocurrency trading platform, ShapeShift has announced today a move that aligns with its value of preserving user privacy. ShapeShift has integrated decentralized exchange (DEX) protocols to its trading solution and can now offer its services without requiring personal information from users.
ShapeShift CEO Erik Voorhes has always been vocal regarding his stance regarding know-your-customer and anti-money laundering (KYC/AML) requirements imposed on cryptocurrency trading platforms.
The rules which are enshrined in the U.S Bank Secrecy Act mandates companies that handle monetary transactions to collect and store the personal information of those using their platforms. While ShapeShift had earlier hesitated to abide by these guidelines, the company, like many others, was forced to bow to the law to remain in business.
ShapeShift started its KYC program in 2018 and also introduced an “advanced surveillance and reporting apparatus,” according to Voorhes.
Fast forward to three years later, and ShapeShift is fully embracing a move that it claims would now protect and dignify their users. The firm would stop its principal business model of trading with customers and, instead, let users trade with decentralized exchange protocols integrated with ShapeShift’s trading platform.
The rise of decentralized finance (DeFi) solutions, especially on the Ethereum Network, was one of the industry’s success stories in the past year since it was now possible for users to trade anonymously and execute transactions via smart contracts. Barring a few setbacks, such as high transaction fees and poorly-designed user interfaces, these protocols are innovative and gradually gaining adoption.
ShapeShift, for a start, is integrating Ethereum based DeFi solutions and ERC-20 assets and plans to integrate other leading chains and native non-wrapped Bitcoin in the first quarter of 2021. The platform will no longer require users to submit KYC information when signing up to use their platform by adopting these tools.
Voorhes described their move as one that “embraces the very principles that Bitcoin brought to the world: decentralization, openness, and immutability.” He also expressed confidence that more crypto-related businesses would move in the same direction soon.
