The Securities and Exchange Commission (SEC) has charged ShapeShift AG, a Swiss company that previously operated out of Colorado, with acting as an unregistered trader in connection with the operation of an online crypto asset trading platform.
To settle the SEC’s charges, ShapeShift agreed to pay a $275,000 penalty.
According to the SEC order, ShapeShift operated ShapeShift.io, an online platform through which it bought and sold crypto assets from and to users from 2014 to early 2021. At its peak, the ShapeShift platform allowed customers to trade at least 79 crypto assets. ShapeShift acted as a broker for these assets, acting as the counterparty to each transaction, marketing itself as a crypto “vending machine”.
Crypto assets purchased and sold by ShapeShift included crypto assets offered and sold as securities as defined in Section 3(a)(10) of the Securities Exchange Act of 1934. See also Section 21 Research Report (a) of the Securities Exchange Act of 1934: The DAO (Exchange Act Rel. No. 81207) (July 25, 2017).
In January 2021, ShapeShift announced that customers will no longer be able to trade crypto assets directly through the ShapeShift.io platform and will no longer act as a counterparty to any customer transactions. In July 2021, ShapeShift announced that it was closing its corporate structure.
ShapeShift consented to the entry of the SEC’s order finding that the company violated Section 15(a) of the Securities Exchange Act of 1934. Without admitting or denying the SEC’s findings, ShapeShift agreed to a cease and desist order and to pay 275,000 $ penalty.