ShapeShift To Transition To Membership-Based Model As It Faces Regulatory Pressure
Popular coin-swapping exchange ShapeShift announced that it will be transitioning to an account-based model backed by popular demand and regulatory pressure.
ShapeShift, which has long been known as a cryptocurrency exchange where no account is needed to make transactions, is now moving away from that as it begins to roll out ShapeShift Membership.
The move, dubbed as a ‘loyalty program’, comes as the exchange faces mounting regulatory pressure and according to the press release, is backed by client demand.
Membership introduced on the platform
For long, ShapeShift has pride itself as a cryptocurrency exchange that values the privacy of its users. This is the reason why no account is needed before an individual can buy or sell cryptocurrencies.
However, they have departed from that ideology and have adopted the membership style of operation. Erik Voorhees, founder, and CEO of ShapeShift, stated that the exchange released a loyalty program entitled ShapeShift Membership.
The CEO, in his note, explained that three things made the exchange change its approach towards managing the platform. The first is the high demand by users who wanted to have account-related features.
As a no-account platform, some features such as transaction history and email notifications are not available to the users.
Secondly, the platform’s increasing interest in the broad phenomenon of tokenization s they look to bring liquidity to various aspects of business/customer relationships.
Finally, working within the confines of the law is something that they have to be very careful about. Even though the exchange believes in financial privacy, how they go about it is also very important.
ShapeShift Membership not yet mandatory
According to the CEO, the ShapeShift Membership is not yet mandatory, but it will be later in the future. It is considered an advanced loyalty program that comes will several features for the users.
Within the rewards program, users can reportedly experience better pricing and receive benefits in various forms across all ShapeShift products and services. The company notes that the benefits will change over time.
Some of the benefits include a discount on exchange rates for those in level 2, volume-based rewards which will be paid in FOX token, and higher transaction limits.
At the moment, ShapeShift has introduced five levels of membership, with only level 1 now available to users for free. The other levels will be opened later on and will have extra benefits compared to the first level.
CEO Erik Voorhees pointed out that the exchange is not happy about the exchange collecting personal information as part of its Membership program but it is something that has to be done.
While ShapeShift is adding new features for the program, Voorhees stressed, it will remain a non-custodial exchange, and thus it would not hold customer funds.
It is left to be seen how users will react to this latest development. Earlier this year, non-custodial crypto exchange, LocalBitcoins, came under huge scrutiny after it introduced user identification requirements on the platform.
Even though LocalBitcoins has been one of the most respected exchanges in the crypto community, many feel that the introduction of user ID requirements went against their belief of anonymity to the user.