Everything wrong with ShapeShift’s SEC settlement
Erik Voorhees’ crypto exchange ShapeShift has agreed to pay a $275,000 fine as part of its settlement with the US Securities and Exchange Commission after it was found to be dealing unregistered securities. ShapeShift has also agreed to desist from violating the Securities Exchange Act of 1934. Three of the five commissioners concurred that ShapeShift dealt unregistered crypto securities from 2014 until early 2021. They also ruled that rather than operating a platform for customers to trade with one another, ShapeShift held crypto asset securities itself and traded against its own users. It did this by selling those assets in securities transactions from its own inventory. As a result of this behavior, the Commission has voted that based on the Securities Exchange Act of 1934 Section 3(a)(5)(A), ShapeShift can be classified as a dealer . A dealer is ‘any person engaged in the business of buying and selling securities (not including security-based swaps, other than security-ba...