Erik Voorhees laments ShapeShift’s ID Policy, calling it a ‘Proactive’ move

Secrecy and intractability are some of the key features that make cryptocurrencies popular. Their adherents want to detach themselves from mainstream financial networks, where identity is public. Hence, it came as no surprise that crypto-traders were displeased when cryptocurrency exchange ShapeShift announced its controversial decision of requiring its customers to hone user identities. Erik Voorhees, CEO of ShapeShift, lamented that this decision wasn’t pushed upon them, but was a “proactive” measure to guard themselves against legal threats. Voorhees, in conversation with CoinDesk, acknowledged the backlash from the community when ShapeShift had made the user identity call. The earlier policy didn’t warrant any user ID and hence, safeguarded the private information of users. Speculation persisted that the new Shapeshift’s ‘membership’ model, announced earlier this month, was the result of constant struggles with regulators. This speculation arose from Voorhees' tweet, where he mentioned that the new ID system as “something we’re building under duress.” His complete tweet is mentioned below:

Tone - KYC and FOX have nothing to do with one another, other than both are aspect of our platform that are rolling out in a similar timeframe. FOX is something we're building because it's useful and cool, and KYC is something we're building under duress.

— Erik Voorhees (@ErikVoorhees) September 5, 2018

Voorhees has always been a firm believer in the libertarian principles of freedom of choice and complete authority over personal data. He has even voiced his opinion against know-your-customer (KYC) regulations that constantly wrangle investors. “KYC was not added as a result of any enforcement action, but rather as a proactive step we took to de-risk the company amid uncertain and changing global regulations,” said Voorhees to Coin Desk. He further added, “it was a strategic decision as we believe the risk of not doing so had gotten too great. It was not made lightly.” Speaking on the legal protection that such an update brings, Voorhees said, “months of legal work and over a million dollars of legal expenses on this topic alone. That is money and time that would've been better spent building things to protect and serve customers.” Regulatory issues were, no doubt, significant to the company incorporating this feature. However, Voorhees mentioned that this was added towards the end of the update and was initially planned as an optional feature. He said, “KYC was thus stuck on to the Membership platform, and while optional membership and account-based features are certainly desired by many of our customers, there is nobody (including us) who desires forced KYC.” His critics have berated him because they think that Voorhees has abandoned the sacred principle that ties together most cryptocurrencies - privacy. The ShapeShift CEO retaliated by saying that he was reluctant to make this change and he is still opposed to government’s invasion of privacy, especially in financial affairs. “We remain committed to the struggle for financial privacy and sovereignty for all humans, and will continue to be tactical about how we further that cause,” he said. He further went on to attack to current system saying, “The status quo is to invade the privacy of millions of innocent people in order to potentially decrease the risk of a few bad actors. We think this is both unjust and ineffective.” In conclusion, Voorhees understands that one individual government’s regulations cannot hold ShapeShift down. “Ultimately, ShapeShift is a corporate entity, and we have to abide by laws around the world,” he concluded. See also: Bitcoin’s decline is necessary to build market foundation: Erik Voorhees See also: ShapeShift’s new Bitcoin [BTC] swapping tool is beneficial in twofold Image via Shutterstock Join our Telegram group