When privacy-centric ShapeShift–run by libertarian Erik Voorhees–announced it was adding Know-Your-Customer (KYC) protocols, some believed it was all over. Trading volume dropped off a cliff, users fled to its rivals and Twitter’s crypto critic community began sharpening the knives. “ShapeShift is dead,” proclaimed one Bitcoin developer on Twitter.
For rival exchange, Changelly, it couldn’t believe its luck. Anna Rosebrook, head of business development thinks they’ll overtake ShapeShift before the end of the year. However, Emily Coleman, ShapeShift’s CMO, says, somewhat paradoxically, that this is a good thing.
“We did see some changes but we still have significant volume and we’ve enjoyed having a bit of downtime so our engineers can accomplish what we’re trying to achieve,” says Coleman. “Last year was such a crazy time, that it’s almost a sigh of relief to step back and make some solid business decisions for our company.”
While the move to accept tighter controls was made under duress, ShapeShift believes that it was a move which helped the company stay ahead of the ever-changing regulatory landscape. Coleman wastes no time in saying that even if an exchange is based in Malta–as Changelly is–it is still subject to the regulations of where its customers are located. This means Changelly could fall foul of a regulator down the line.
Shift, shift, and shift again
Since the KYC announcement, Shapeshift has been busy building a new, yet-undisclosed product–due to open as a private beta on December 12 and launch in
But after much-hyped crypto portfolio service Prism was shut down on October 11–for reasons that weren’t made public–it’s clear that ShapeShift’s strategy is to keep building things, and hoping a regulator doesn’t decide to close them down. So far, CoinCap, it’s crypto price tracker, and KeepKey has survived. Can ShapeShift keep pivoting under regulatory pressure and stronger competition or will it eventually fall over? Time will tell.