ShapeShift CEO Erik Voorhees Says Controversial KYC Decision to Collect User Data Was Proactive
Earlier this month BitcoinExchangeGuide had reported that ShapeShift had announced that it will be introducing a system of membership, which will serve as an advanced loyalty system for its ongoing users. Over time, it's believed that this system will lead to both a system of better pricing overall and a far superior user experience.
This drew a lot of criticisms from all over the crypto ecosystem. Even 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.
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.
— Andreas ☮ 🌈 ⚛ ⚖ 🌐 📡 📖 📹 🔑 🛩 (@aantonop) September 5, 2018
Some had speculated that ShapeShift's new, soon-to-be mandatory “membership” model was the result of direct or indirect threats from regulators. (This speculation may have been fueled in part by Voorhees' own tweet in which he described the new customer ID system as “something we're building under duress.”)
Today, CEO and founder Erik Voorhees confirmed that the decision to require user identities wasn't forced upon it but signified a “proactive” step to reduce legal risks.
“It was a strategic decision as we believe the risk of not doing so had gotten too great. It was not made lightly.”
Voorhees said the firm had spent “months of legal work and over a million dollars of legal expenses on this topic alone. That is money and time that would've been better spent building things to protect and serve customers.” While his comments confirm that regulatory considerations were a driving factor in the decision to make account identities mandatory, Voorhees framed it as a later addition to a program originally developed as an optional feature.
However, the CEO confirmed that ShapeShift is “still committed to the struggle for financial privacy and sovereignty for all humans, and will continue to be tactical about how we further that cause.”
“Ultimately, ShapeShift is a corporate entity, and we have to abide by laws around the world,” Voorhees added defending his company’s steps.