ShapeShift Agrees to Pay $275,000 to SEC to Settle Charges

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On Tuesday, the US Securities and Exchange Commission (SEC) announced a cease-and-desist order against cryptocurrency firm ShapeShift for engaging in unregistered securities dealing.

According to the filing, the SEC determined that ShapeShift offered and sold crypto assets as investment contracts, thereby classifying them as securities under the 1946 Howey test.

To settle the charges, ShapeShift has agreed to pay a $275,000 civil penalty and refrain from future violations of securities regulations.

Founded by Erik Voorhees, ShapeShift operated in Colorado from 2017 to 2020 before shutting down its direct crypto asset exchange platform in 2021. It is now registered in Switzerland.

This SEC action adds to the ongoing legal disputes between the agency and other cryptocurrency entities, such as Ripple, Coinbase, and Kraken exchange, over whether the sale of crypto assets should be classified as securities transactions.