The Securities and Exchange Commission (SEC) has charged ShapeShift AG, a Swiss company that previously operated out of Colorado, with acting as an unregistered dealer in connection with its 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’s order, ShapeShift operated ShapeShift.io, an online platform through which it bought and sold crypto assets from and to users from 2014 until early 2021. At its peak, the ShapeShift platform allowed customers to exchange at least 79 crypto assets. ShapeShift acted as a market-maker for these assets by serving as the counterparty to every transaction, marketing itself as a crypto “vending machine.”
The crypto assets bought and sold by ShapeShift included crypto assets that were offered and sold as securities as defined in Section 3(a)(10) of the Securities Exchange Act of 1934. See also Report of Investigation Pursuant to Section 21(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 would no longer be able to exchange crypto assets directly through the ShapeShift.io platform and it would no longer act as the counterparty to any customer transactions. In July 2021, ShapeShift announced that it was winding down 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 a $275,000 penalty.
