SEC Files Cease-and-Desist Order Against ShapeShift, Agrees To Pay $275,000
The U.S. Securities and Exchange Commission (SEC) has issued a cease-and-desist order against ShapeShift. The cryptocurrency exchange was previously headquartered in Denver, Colorado.
The SEC alleged that the company operated as an unregistered dealer for cryptocurrencies that were considered securities before 2021.
Key points:
- SEC files a cease-and-desist order against ShapeShift for operating as an unregistered securities dealer.
- ShapeShift agrees to pay a $275,000 fine and cease violating the Securities Exchange Act.
- The exchange allegedly offered at least 79 crypto assets to customers, some of which were considered securities.
- ShapeShift shut down its U.S. exchange operations in 2021.
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ShapeShift has agreed to pay a $275,000 fine and stop violating the Securities Exchange Act as part of the settlement offer that the SEC accepted.
ShapeShift accused of offering at least 79 cryptocurrencies
The exchange, which shut down its U.S. operations in 2021, was accused of offering “at least 79 crypto assets” to its customers between 2014 and 2021. The SEC alleged that some of them were sold as investment contracts and securities.
The agency claims that ShapeShift “regularly bought and sold crypto assets for and from its own accounts, carrying inventory in – and holding itself out to customers as willing to buy and sell – the crypto assets offered on ShapeShift.io.”
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The SEC, however, did not name any specific digital assets as securities in the filing. The issue of whether certain cryptocurrencies should be classified as securities has been a point of contention between the agency and the wider crypto industry.
ShapeShift founder Erik Voorhees responded to the SEC’s action by emailing a link to a tweet in which he quoted from one of the Federalist papers. Voorhees also suggested his disagreement with the agency’s stance on crypto regulation.
