ShapeShift Moves to a Mandatory Membership Model; Sparks Controversy

Industry 1 min, 51 sec READ

by Rahul Nambiampurath

ShapeShift will soon require users to submit personal information as part of their new "Enhanced Loyalty" membership program.

A blog post authored by ShapeShift CEO Erik Voorhees on September 4 has revealed that the exchange service will soon be moving away from its anonymous roots. The migration will be introduced in the form of a new ShapeShift membership program, which will offer “higher trading limits, rewards on trading volume, better pricing, private market and trade data, and early access to new coins, products and services.” With this change, however, ShapeShift will also require users to forfeit anonymity by submitting personal information.

The post was also accompanied by a silent change to the platform’s terms of service, which stirred some controversy in the crypto community, on platforms such as Reddit. One clause in particular potentially allows the company to freeze or block a user’s account if it is deemed to be associated with a ‘Prohibited Activity’. The classification of such an activity is also subject to change at any time.

Voorhees: Membership is a "Loyalty Program"

According to Voorhees, the membership structure is meant to resemble an enhanced loyalty program that will offer users “better pricing and a superior user experience.” Furthermore, Voorhees claims several of the platform’s upcoming features could not be implemented without first setting up an infrastructure for user accounts. The company claims that its users have long been clamoring for the ability to view transaction history, save/whitelist addresses, and receive email notifications. While the first level of ShapeShift membership is available right now, levels two through five will be implemented later. The level of each user's membership will be ascertained based on the number of FOX tokens they hold in their wallet.

ShapeShift is not the only cryptocurrency service that has recently decided to start requiring user data. Citing legal compliance, peer to peer trading website LocalBitcoins also began asking users to verify their identity if their trading volume exceeded a certain threshold. In the case of ShapeShift, users will be able to continue without signing up for the time being, but eventually, membership will be made mandatory.