ShapeShift

ShapeShift is a non-custodial cryptocurrency trading platform active in the United States that offers its customers an unusually high level of anonymity by not requiring them to open accounts ahead of transacting on its platform. (Most cryptocurrency exchanges demand to hold their customers' cryptocurrencies as well as their fiat currencies on deposit rendering them "custodial" exchanges.) 
== Overview ==
ShapeShift received modest early venture capital support from crypto enthusiasts Barry Silbert and Roger Ver. In June 2015 ShapeShift cut off service to New York State residents in response to that state's new regulatory policies requiring personal identification of everyone transacting with cryptocurrency in the state when New York adopted the BitLicense. Later investors in ShapeShift include California-based Pantera Capital and FundersClub and Colorado's Access Venture Partners. 
In a vote of confidence for ShapeShift's low-overhead customer approach, Overstock CEO Patrick Byrne told Fortune magazine in August 2017 that Overstock was using ShapeShift to accept bitcoin and 40 other cryptocurrency payments from customers. 
Erik Vorhees, the founder and CEO of ShapeShift, long refused to adhere to standard practices for antimoney laundering and customer identification that are commonly followed by U.S. financial entities including cryptocurrency exchanges. Vorhees has noted that businesses like ShapeShift are not clearly subject to those regulations. ShapeShift processed millions of U.S. dollars worth of bitcoin into untraceable Monero that had been stolen by hackers, believed to be from North Korea, who executed the so-called WannaCry attacks on businesses and governments in 2017 and 2018. In a September 28, 2018 Article, Wall Street Journal reporters Justin Scheck and Shane Shifflett identified ShapeShift as the largest processor of fraudulently obtained bitcoin among all cryptocurrency exchanges active in the U.S. at the time. 
ShapeShift had already announced earlier in September 2018 that it would implement customer identification procedures. Vorhees told CoinDesk at the time that “KYC was not added as a result of any enforcement action, but rather as a proactive step we took to de-risk the company amid uncertain and changing global regulations.” 
Vorhees wrote in a January 2019 blog post that the company had laid off 37 of its approximately 100 employees due to external business conditions that it characterized as "crypto winter." 
The next month, in February 2019, Vorhees told attendees at ETHDenver, an Ethereum-focused developer conference, that ShapeShift was to begin testing a new platform that integrates several ShapeShift services, including its wallet, KeepKey, and pricing service, CoinCap. Vorhees maintains that ShapeShift had not altered its non-custodial stance vis-a-vis customers and their cryptocureency holdings.
In late 2018, ShapeShift began checking user identification information to comply with regulatory requirements. Consequently, the platform's traffic decreased by 90 percent.
=== De-listing Bitcoin Cash SV ===
In April 2019, Craig Wright began arguing with a Twitter user called "Hodlnaut," a bitcoin user who became known for the "Lightning Torch" experiment, which was a promotional demonstration of the Lightning Network's capabilities. After achieving a large Twitter following, Hodlnaut made public posts criticizing Wright, who later sent Hodlnaut a letter accusing the Twitter user of being a "fraud," and threatening legal action. This triggered a huge wave of support for Hodlnaut, as well as renewed hate for Wright, from thousands of Twitter users.
Binance later announced it would delist BCHSV. Binance's CEO Changpeng Zhao also criticized Wright over Twitter. Later that month, Shapeshift and Kraken announced that it would be doing the same.
=== Commission-free Trading and Fox Tokens ===
Following in the footsteps of retail trading firms like TD Ameritrade and Charles Schwab, ShapeShift announced in November 2019 that the company had begun offering (commission-)"free" perpetual trades. Instead of commissions, customers would be given 100 digital tokens, called "Fox Tokens." Erik Voorhees explained in a phone interview with Bloomberg reporter Olga Kharif that each Fox Token confers the right to $10 worth of "free" trading on a rolling 30-day basis. The tokens remain in the user's wallet and cannot be spent, though more tokens can be purchased to give the user the "right" to more free trades.
== References ==
Category:Cryptocurrency
Category:Trading
Category:Exchange
Category:CryptoMarketsWiki