ShapeShift lived up to its name with a 2021 structural transformation, but it didn’t escape the wrath of the SEC.
Cryptocurrency exchange ShapeShift submitted a settlement offer to the United States Securities and Exchange Commission (SEC), accepting the agency’s order to cease and desist and agreeing to pay a penalty. The exchange had ceased the operations in question in 2021 when the exchange converted into a decentralized autonomous organization (DAO).
According to SEC allegations, ShapeShift operated an online platform structured as a crypto “vending machine” from 2014 to January 2021. ShapeShift served as the “market maker” and counterparty for the trades, enabling ShapeShift to generated revenue on the price spread on the trades. According to the SEC order:
ShapeShift was incorporated in Switzerland and headquartered in Colorado for several years. At its peak, ShapeShift offered at least 79 assets, some of which the SEC defined as securities under the Securities Exchange Act of 1934 and the Howey test. ShapeShift agreed to pay a $275,000 penalty for its actions.
