Shapeshift is Ending Its KYC Program to Embrace DeFi

As the DeFi space continues to develop and increase, many entities are migrating into the industry to increase customers’ privacy. The most recent institute to transition into the DeFi space is the Switzerland-based digital assets trading company, ShapeShift.io.

In a press release published on Wednesday, the digital assets trading company announced that it would be ditching its traditional Know Your Customer(KYC) protocol to welcome decentralized finance (DeFi) protocols.

The company made this transition into DeFi to provide its customers with an increased level of anonymity since it will allow ShapeShift customers to run transactions on the exchange’s trading platform directly without the company as a third party.

The DeFi protocols will further increase the customers’ privacy, security, and transparency of their transactions. Integrating these protocols into the company’s will also afford customers cheaper transaction rates on the exchanges platform.

Commenting on this latest move, the CEO of ShapeShift, Eric Voorhes, said,

“The pace of innovation in decentralized technology is inspiring. These borderless, open-source projects have created a far safer user experience, so we’ve decided to integrate them into ShapeShift’s platform going forward.”

ShapeShift’s DeFi protocols are already open for Ethereum and ERC20 assets customers and hope to add support for bitcoin before the end of Q1 2021.

Decentralized protocols are increasingly gaining ground in the crypto community, providing users with the liberty to buy and sell crypto assets without giving personal identification details that could compromise their privacy.

Voorhes spoke about the complexity of centralized protocols, saying:

“Centralized exchanges are black boxes: there is no way to audit them from the outside. You have to trust the operators of that exchange and any other party that can access that data, and that trust is often breached.”

Voorhes has never been a big fan of the rule demanding crypto entities to complete KYC compliances. Although ShapeShift was founded in 2014, the company did not ask customers for personal identification or KYC details until the 1st of October 2018, following pressure from regulators.

The CEO had earlier spoken out against the KYC rule made by financial regulators, saying that it is unethical to ask users for personal details.