Instant bitcoin and altcoin exchange ShapeShift has received $525,000 in seed funding from investors Barry Silbert and Roger Ver.
The Swiss-based platform, which lets users swap between 25 digital currencies and tokens, differs from traditional exchanges in that it operates without user accounts and requires no form of registration.
Silbert, who invested as part of the Digital Currency Group, told CoinDesk:
“ShapeShift has reinvented the altcoin market and enables the fastest, most efficient and least risky way for people to exchange different digital currencies and tokens.”
Shapeshifting CEO
As part of the funding announcement, entrepreneur Erik Voorhees has come forward as ShapeShift’s creator and CEO, having operated under the alias Beorn Gonthier – a reference to J R R Tolkein’s own shapeshifter – since its launch in 2013.
“I wanted the early launch of ShapeShift to be about the innovation of the site itself and its advancement over traditional order-book exchanges, rather than about me,” he said.
According to Voorhees, the $525,000 will go towards improvements to the exchange engine, as well as marketing and legal work in Switzerland, the company’s base.
The ShapeShift team now includes eight full-time staffers, including four developers.
Volume increase
ShapeShift claims to have witnessed a staggering increase in volume – 30% every month over the past half year. Besides speed and ease-of-use, the platform – which also offers a browser plugin – says it gives users “trust by design”.
Voorhees cited the high-profile hacking of altcoin exchanges BTER and MintPal as two key reasons why users need a new kind of exchange, one that doesn’t act as a custodian of funds.
“There is a better way. Bitcoin services can be built to significantly reduce or eliminate the need for trust at all … ShapeShift was built as a demonstration of this principle: exchanges occur without custodianship of user funds. Indeed, there are no user accounts whatsoever.”
The company also runs entirely on bitcoin, so it has no bank accounts and no fiat passing through its books. With regards to regulation, Voorhees said ShapeShift has received explicit favorable legal opinion in Switzerland and complies with all existing requirements in the markets it operates in.
“Certainly regulations in the bitcoin and finance world can change, so we are watching the space carefully and will adapt as needed,” he added.
Images via ShapeShift
Correction: A previous version of this article stated that ShapeShift has raised £525,000. This has since been corrected to $525,000.