Shapeshift used to be a very popular cryptocurrency exchange service that worked fast and easy – you could convert one cryptocurrency into another without creating any accounts.
Right now Shapeshift has introduced changes to their platform that involve a new account-based model, KYC (documents submission for memebers), a proprietary token FOX and a loyalty program.
ShapeShift Membership is a loyalty program
Benefits, depending on level, may include higher trading limits, rewards on trading volume, better pricing, private market and trade data, and early access to new coins, products and services
Shapeshift CEO is saying critics have no idea of the bigger picture, he had to do it, and he is being closely watched and can’t reveal all the details:
To clarify, the Membership program and the FOX token are systems we wanted to build for our users. The imposition of mandatory KYC within that Membership program is not something we want to do, nor something any user wants. It's a heavy decision done to derisk under duress.
— Erik Voorhees (@ErikVoorhees) September 6, 2018
Not appropriate to discuss on Twitter unfortunately. Yay free speech.
— Erik Voorhees (@ErikVoorhees) September 6, 2018
This is not the forum in which to discuss such things.
— Erik Voorhees (@ErikVoorhees) September 4, 2018
There has been a lot of criticism of this decision:
So I can understand why @ShapeShift_io is looking to collect all your personal information to share w/ Government (It’s what centralized companies do when they process your $ or #Bitcoin)
But was is necessary for @ErikVoorhees to also become an #ICO scammer w/ useless $FOX token? pic.twitter.com/ujyn3P9VFD— Tone Vays [@Bitcoin] (@ToneVays)September 5, 2018
Clearly the plan is to incentivize people to submit their verification documents by both attracting them with loyalty program and restricting their unverified usage. No matter what the motivation behind this move, it’s an unpopular change.
Shapeshift.io alternative
For the users who do not wish to participate in the loyalty program nor register as memebers at Shapeshift and provide their government-issued IDs, there is a similar non-custodial exchange service: flyp.me
Right now flyp.me works in a similar way – you enter the destination wallet, send the cryptocurrency you’re exchanging and get the new coins to the address you have submitted.
Right now the exchange volume is not high, at ~3 BTC split over 38 transactions, but they’ve done a lot of volume in summer 2018 which means the platform is capable of substituting shapeshift.io:
Similar services my emerge soon as it always happens when a major player adopts unacceptable behavior, but for now if you wish to convert and exchange coins using a non-custodial (i.e. not storing users’ funds) exchange you can use flyp.me.