ShapeShift, a non-custodial cryptocurrency exchange founded in 2014, is integrating DeFi applications to get rid of KYC regulations and rules that cost it the departure of almost 95% of its users in 2018.
Erik Voorhees, CEO and founder of shapeshift, announced that the exchange of cryptocurrencies, will begin integrating decentralized finance products and applications (DeFi), such as decentralized exchanges (DEX), to process orders and trades within its platform, and escape the requirements of Know Your Customer (KYC), which was part of the exchange in 2018, which cost it the loss of almost 95% of its customers at that time.
In his recent statements, Voorhees noted that the cryptocurrency exchange integrated KYC regulations as a “proactive step,” which would help eliminate risk on the platform, and comply with the requirements and demands of regulators, but that the idea of having to hand over personal data to carry out commercial operations with cryptocurrencies within the platform was not well received by the user community, so the exchange began to see the departure of many of its clients and services from the ecosystem, such as Exodus, BTCPay, Edge, among others.
Now, with the implementation of DeFi applications, ShapeShift will begin to phase out KYC requirements gradually, to help users easily connect with digital services and ease the KYC burden for both the platform and customers and users.
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Back to its original purpose with a dozen DEX's
Voorhees stated that ShapeShift’s original vision and purpose was to offer a scalable, non-custodial service that allows users to access instant liquidity without the need for a trusted third party. To reclaim its original model, ShapeShift is integrating a dozen decentralized exchanges to help customers and traders have easy access and availability to liquidity, pricing, asset variety, and superior security.
According to Voorhees, DEXs will help the company phase out its own centralized trading activity and KYC policies, favoring the creation of a decentralized alternative as ShapeShift becomes a platform “100% DEX-based for customers.” Decentralized exchanges represent a major evolution that will allow cryptocurrency exchange platforms to once again offer reliable and scalable services.
Among the DEXs that ShapeShift is integrating are: Uniswap, Balancer, Corners, Bancor, Kyber, 0x, mStable and another half dozen more.
Access in more jurisdictions
Unlike when ShapeShift integrated KYC regulations, which left the cryptocurrency exchange unable to provide services to clients in New York and Washington (USA), Cuba, Iran, and North Korea, due to different legal provisions and limitations, with the integration of DEXs, the company plans to expand its services to many more jurisdictions; since decentralized exchanges are not censored or restricted by governments or authorities, so they can operate freely in any jurisdiction. In this way, ShapeShift will offer a frictionless service, freeing clients and users from having to provide their personal and private information when using the platform's services.
“For example, a centralized exchange in Venezuela is restricted by capital controls, while in DeFi it is not. A decentralized protocol operates exactly the same in Venezuela as anywhere else.”
For Voorhees, DEXs, along with non-custodial services like ShapeShift, will create a more natural environment for the development of decentralized finance integrations, and will foster the creation of much more varied new DeFi products and services, even allowing for the design of a decentralized exchange service for the queen of cryptocurrencies: Bitcoin.
ShapeShift plans to integrate Bitcoin (BTC) into its services via DEX integration this quarter, Voorhees said. Additionally, the exchange also plans to support cryptocurrencies and tokens from other networks. block chains that are not based on Ethereum; all this during the first quarter of this year.
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