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QuadrigaCX, Bitfinex, Binance… the list of exchanges that have seen customer funds stolen is increasing on a weekly basis. But there’s one exchange—ShapeShift—that’s determined to buck the trend, and it believes that its model is one all exchanges should be emulating.
Founded in 2014, ShapeShift is a “non-custodial exchange,” meaning it holds no customer funds. Instead, it functions as a marketplace, ensuing that it has sufficient liquidity to cover the trade.
Now the company is undergoing a metamorphosis, in a bid to expand its offerings and get people to do virtually anything crypto related on its platform.
“It’s very much like the butterfly that comes out of the caterpillar,” ShapeShift founder and CEO, Erik Voorhees told Decrypt at the Consensus conference during New York Blockchain Week.
The company recently launched its new ShapeShift platform in beta testing mode. What makes it unique, said Voorhees, is not its non-custodial nature, but the fact that all the tools you need to trade, receive, buy and sell cryptocurrency are in one place. Better yet, he said, there’s a “UX even a grandmother can be happy with.”
A long-time crypto advocate, Voorhees is also a somewhat controversial figure in the crypto space. Events such as the imprisonment of his former BitInstant boss and an agreement with the U.S. Securities & Exchange Commission to settle multiple charges have fueled speculation about his allegiances and motivation. ShapeShift recently antagonized its customers by introducing kycprotocols.
But, having weathered a number of storms, Voorhees is a crypto survivor and adamant that ease of use is the solution to the perennial problem of people leaving their crypto with a third party, instead of holding it on their own.
“People use exchanges as their wallet, and we’re trying to build something that stops that from happening. It gives people an easy way to interact with crypto without holding custody of their funds—that’s the whole point.”
A common approach, said Voorhees, is for people to use several wallets, in addition to the Coinbase exchange, to buy and sell into a bank account, and the Binance exchange, to trade. Instead, Shapeshift wants to make it easy for users to do all of that, right on its exchange.
Voorhees’ non-custodial approach is alligned to his Libertarian tendencies. But he claims that he’s had to temper his ideals.
“A lot of people in the crypto world have very ideological beliefs, myself included, but it’s not really acceptable to have those beliefs in the US,” he says. “I have to censor myself constantly.”