Category Archives: Erik Voorhees

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ShapeShift Will No Longer Be Anonymous

The Founder and CEO of ShapeShift, Erik Voorhees, has announced that the exchange is launching a membership program and soon, anonymous trading will not be available.

For years, ShapeShift has been an easy way for cryptocurrency users to convert cryptocurrency into other types of cryptocurrency. The process is efficient and completely anonymous, up to now at least. The reason it was able to offer anonymous transactions is because it only offered crypto to crypto, with no fiat options.  Generally, in the past, customer information was only required for fiat to crypto transactions.

Cryptocurrency transactions are intrinsically immutable, meaning they can’t be reversed, so customer information is not needed by ShapeShift to prevent chargebacks. However, regulations on crypto exchanges have been increasing, and now apparently even crypto to crypto exchanges like ShapeShift have to collect know your customer (KYC) data to avoid getting in trouble with the government.

Collecting KYC data can help prevent money laundering, but simultaneously crypto users typically dislike their data being collected. This defeats one of the purposes of crypto, which is to be private and outside of government control. Many will feel that data collected on ShapeShift could be used later to open tax cases against customers.

It is likely that numerous crypto users will stop using ShapeShift due to this new KYC policy. Already BTCPay, a Bitcoin payment service, has said it is done using ShapeShift due to this policy change.

We will probably stop supporting @ShapeShift_io .

The shapeshift button does not work anymore, and they will probably require KYC soon.

Instead, I am thinking about open sourcing @ShapeShift_io by making it easy for anyone to be liquidity provider like shapeshift.

— BTCPay Server (@BtcpayServer) September 5, 2018

Aside from announcing the end of anonymity, ShapeShift has announced a membership program. It will be a tiered membership program where level 1 is free but for levels 2 through 5, increasing amounts of FOX coin must be held. FOX is a new Ethereum token that will be launched by ShapeShift soon.


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Telegram Cancels ICO Amid Tightening of Regulations

From what was rumored to be the biggest initial coin offering (ICO) in history, Telegram has now shut down its much-publicized ICO, as reported by the Independent.

While some have claimed that Telegram already successfully raised its monetary target, it seems more likely that the cancellation was due to the tightening of ICO regulations happening across the world and particularly in the US.

ICOs have collectively raised USD 12 billion in funds since 2014, but perceived connections with scams and fraudulent activities have led the Securities and Exchange Commission (SEC) to scrutinize the legality of these fundraising efforts.

SEC chairman Jay Clayton recently testified before the US Congress, saying, “Many ICOs are being conducted illegally. Their promoters and other participants are not following our security laws.”

Satis Group created a resource to identify ICOs and cryptocurrencies as scams, but Telegram’s fundraising for the Telegram Open Network (TON) coin does not appear to fall into this category. Officials have argued, however, that this could not be accurately identified until the final launch that was scheduled for later this year.

Telegram’s ICO

In the white paper detailing the ICO held by Telegram, the company detailed its objective to create a cryptocurrency that could overcome the limitations of Bitcoin and the other leading cryptocurrencies. The digital currency was advertized to offer lower transaction fees at quicker transaction times.

The white paper reads: “To this day, no consensus-backed currency has been able to appeal to the mass market and reach mainstream adoption. Telegram will use its expertise in encrypted distributed data storage to create TON, a fast and inherently scalable multi-blockchain architecture.”

Frustrated investors

Investors and industry pundits have reacted angrily to the cancellation, which reportedly raised USD 1.7 billion. While this gives Telegram enough finances to launch TON, they have put the cryptocurrency on hold.

ShapeShift CEO Erik Voorhees is one such frustrated industry specialist who vented on Twitter.

The SEC has created an environment where only the rich (aka “accredited investors”) are able to get access to financial deals. The plebeians must stick to the lottery. Telegram Cancels public sale of tokens due to SEC:

— Erik Voorhees (@ErikVoorhees) May 2, 2018

Telegram has a long way to go to rebuilding a relationship with the investors. With its ICO promoted as bringing the world the first mainstream cryptocurrency, this is disappointing news for some in the cryptocurrency market.


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