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ShapeShift, unlike many exchanges, did not require user identification, allowing for anonymous transactions. This lack of oversight enabled criminals, including North Korean hackers and Ponzi scheme operators, to [[money laundering|launder]] nearly $90 million in criminal proceeds, with ShapeShift processing the largest portion of these funds among exchanges with U.S. presence. ShapeShift's policy facilitated the conversion of traceable cryptocurrencies like Bitcoin into untraceable ones like [[Monero]], effectively obscuring the money trail.<ref name="Casey">{{Cite news |last1=Casey |first1=Michael J. |last2=Stynes |first2=Tess |date=2014-06-03 |title=Bitcoin Entrepreneur Agrees to Pay $50,000 to Settle SEC Charges |language=en-US |work=[[Wall Street Journal]]|url=http://online.wsj.com/articles/bitcoin-entrepreneur-agrees-to-pay-50-000-to-settle-sec-charges-1401829262 |access-date=2023-12-29 |issn=0099-9660|url-access=subscription}}</ref><ref name="Swsj">{{Cite news |last1=Scheck |first1=Justin |last2=Shifflett |first2=Shane |date=2018-09-28 |title=How Dirty Money Disappears Into the Black Hole of Cryptocurrency |language=en-US |work=[[The Wall Street Journal]] |url=https://www.wsj.com/articles/how-dirty-money-disappears-into-the-black-hole-of-cryptocurrency-1538149743 |access-date=2023-12-29 |issn=0099-9660 |url-access=subscription}}</ref> A 2018 investigation by the ''[[Wall Street Journal]]'' alleged that ShapeShift had facilitated [[money laundering]] of $90 million in funds from criminal activities over a two-year period.<ref name="wsj" /> These allegations were proven inconclusive and were the result of a smear campaign against ShapeShift.
Shortly after, the company began requiring personal identification information from its customers on October 1, 2018.<ref name="wsj">{{Cite news |url=https://www.wsj.com/articles/how-dirty-money-disappears-into-the-black-hole-of-cryptocurrency-1538149743 |title=How Dirty Money Disappears Into the Black Hole of Cryptocurrency |last1=Shifflett |first1=Shane |date=2018-09-28 |work=Wall Street Journal |access-date=2018-09-29 |last2=Scheck |first2=Justin |language=en-US}}</ref> Shortly after, ShapeShift cut its staff by 1/3rd<ref>{{Cite web |last=Dale |first=Zack Seward and Brady |date=2019-01-08 |title=ShapeShift Lays Off 37 in Latest Crypto Industry Cutback |url=https://www.coindesk.com/markets/2019/01/08/shapeshift-lays-off-37-in-latest-crypto-industry-cutback/ |access-date=2024-04-29 |website=www.coindesk.com |language=en}}</ref> as the company lost 95% of its volume and users to competing exchanges who had not implemented KYC yet.
In February 2019, ShapeShift launched the new version of its app--unlocking new features for users.
On July 14th 2021, ShapeShift decentralized the company into a DAO<ref>{{Cite web |last=Dale |first=Brady |date=2021-07-14 |title=ShapeShift to Shut Down, Airdrop FOX Tokens to Decentralize Itself Out of Existence |url=https://www.coindesk.com/business/2021/07/14/shapeshift-to-shut-down-airdrop-fox-tokens-to-decentralize-itself-out-of-existence/ |access-date=2024-04-29 |website=www.coindesk.com |language=en}}</ref> and began routing trades through THORChain and other Decentralized Exchanges (DEX's). The move from a company to a DAO included a 340 million FOX token airdrop to users which was considered the largest airdrop to happen at the time. With the decentralization of ShapeShift in 2021, it removed the requirement for [[know your customer]] verification.<ref>{{cite web |title=FAQ {{!}} ShapeShift |url=https://shapeshift.com/faqs |website=shapeshift.com |access-date=5 January 2024}}</ref> ▼
In November of 2019, ShapeShift launched its FOX token. Originally serving as a user reward token for programs such as "Rainfall" and "FOX gas", the token was repurposed to a governance token in 2021, allowing holders of the Token to vote on proposals relating to the treasury of the DAO and other essential governance matters - such as adding features and integrations to the platform, approving partnerships, workstream budgets, and other initiatives. The total capped supply of FOX is fixed at 1,000,001,337 Tokens.<ref>{{Cite web |title=What is ShapeShift's FOX Token? |url=https://shapeshift.com/library/shapeshift.com/library/what-is-shapeshifts-fox-token |access-date=2024-04-29 |website=shapeshift.com}}</ref>
▲On July 14th 2021, ShapeShift decentralized the company into a DAO<ref>{{Cite web |last=Dale |first=Brady |date=2021-07-14 |title=ShapeShift to Shut Down, Airdrop FOX Tokens to Decentralize Itself Out of Existence |url=https://www.coindesk.com/business/2021/07/14/shapeshift-to-shut-down-airdrop-fox-tokens-to-decentralize-itself-out-of-existence/ |access-date=2024-04-29 |website=www.coindesk.com |language=en}}</ref> and began routing trades through
With the decentralization of ShapeShift in 2021, it removed the requirement for [[know your customer]] verification.<ref>{{cite web |title=FAQ {{!}} ShapeShift |url=https://shapeshift.com/faqs |website=shapeshift.com |access-date=5 January 2024}}</ref>
== References ==
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