ShapeShift & KeepKey — Your Crypto, Your Control

At the ETHDenver event in February 2019, ShapeShift announced that the platform would be undergoing a major rebranding exercise, with an improved version centered around the user experience and integration of it’s other products, including the hardware wallet (KeepKey) and cryptocurrency tracker (CoinCap). One of the first steps in this process was to begin holding a closed beta program for selected users to try out the new version. I was lucky enough to receive one of the early beta invites last year and set about testing the platform alongside their KeepKey hardware wallet.

What sets them apart?

Prior to September 2018, ShapeShift was known as the “exchange without accounts”. Then came the announcement from Erik Voorhees, Founder and CEO, introducing ShapeShift Membership. [1] ShapeShift Membership is a loyalty program with various benefits and rewards, but is account-based and represents a significant departure from the previous model that they had pioneered.

Beforehand, there were no accounts, you simply visited the site, selected your desired exchange pair, sent your sending asset to them (plus a refund address in case it couldn’t be processed), and entered your receiving wallet address for the asset you wanted to exchange to. ShapeShift then managed that exchange behind the scenes, delivering your new asset to your recipient address usually within minutes. This provided a convenient and very simple means of exchange rather than running the process manually yourself through your wallet(s) and exchange account(s).

So why the change?

In the statement at the time, Erik said it was down to three themes:

1. Requests from users to have account-related features, such as transaction history and notifications.

2. ShapeShift’s interest in the ability to build tokenised loyalty programs where customer engagement itself can become an asset.

3. Being prudent and thoughtful regarding the legal grey area surrounding digital assets and the jurisdictional practice of requiring the capture of personal information for KYC/AML purposes (Know Your Customer/Anti Money Laundering).

The third theme here is the big one. ShapeShift has always been clear that this was not something they wanted to do. They believe that all individuals deserve the right to financial privacy, just as they deserve privacy in other aspects of their lives, and this should be defended. They can’t ignore the facts of where they and their customers are based and the regulatory requirements that follow, however. [2]

Due to the specific nature of the ShapeShift asset exchange service, it is not strictly non-custodial. Yes, customers can retain custody of their assets, however, for the brief amount of time an exchange is taking place, the assets involved in that transaction are received and held by ShapeShift until the receiving asset is sent back out to the customer. They, therefore, have custody momentarily, much like a vending machine or in retail cash transactions. There is a slight trade-off there of course, but most would accept that for the convenience of being able to exchange in and out of multiple assets whilst retaining custody outside of these transactions.

Anyway, as a result, the service is not 100% non-custodial and therefore they have to be pragmatic about the way they navigate the regulatory environment. As such, they faced the difficult decision of continuing to do what they believe is the right thing, but risk the service being shut down eventually, or go against those beliefs and continue to fight for the cause by being smart about their approach. Indeed, during an interview at ETHDenver, Erik Voorhees was quoted as saying:

“I felt like I had to do something morally wrong to allow the company to persist.”

I understand this and I’m inclined to believe and agree with them. In that sense, they have done not what they wanted to do, but what they were effectively forced to do, in order to fight more effectively another day.


ShapeShift is headed up by Bitcoin OG Erik Voorhees. Erik has many years of experience in the space since the days of BitInstant, and also founded the website Satoshi Dice, which was subsequently sold in 2013. [3] His experienced team is complemented by investments from the likes of the Digital Currency Group, Pantera and Blockchain Capital. [4]

KeepKey was founded in 2014 and was operated by a separate company until it was bought out by ShapeShift in 2017.

Erik Voorhees

The KeepKey

Having received the beta access code, I also ordered a KeepKey which is required to have full send/receive/trade functionality on the new ShapeShift and downloaded the latest v6.1.0 update which is required to work with the new platform. Not everyone will be happy about this, but the KeepKey device comes in at an attractive $79 regular price point and they have been running 50% and 60% off promotions in conjunction with the beta launch. For me, that’s very reasonable and competitive compared to rivals Ledger and Trezor. I would note the high shipping fee concerns of some users, however. remains an option (at least for now as the new platform will ultimately replace it once feature parity is reached) for those who do not wish to use a KeepKey, and they are also working on additional hardware wallet integration with the new ShapeShift, though believe the KeepKey will be the preferred wallet of choice for the platform. Their team has also confirmed that the .io functionality of trading using wallets that are not connected to the platform will be added in future releases.

Read KeepKey Reviews on CoinCodeCap

The KeepKey comes with no instructions in the box (great for the environment), however, the setup URL provided didn’t lead to the setup information and instead just went to the generic site, meaning I had to search for the setup information from there. This has since been rectified. As it was a new KeepKey, I also had to complete the initial setup by downloading the existing KeepKey client from the Chrome web store and follow the support instructions.

The device itself is slick, three times as large as a Ledger Nano S and twice as large as a Trezor One. The screen fills one entire side of the device, is very clear to read and can display QR codes as well as digits. There is one button on the device, large enough not to be fiddly, and pin entry is handled on your computer screen rather than the KeepKey (the device shows a random arrangement of numbers in blocks and you click on the corresponding blank blocks on your computer screen, keeping it secure but more convenient). It feels solid and well constructed. In this sense, it is much more user friendly than its competitors, surprisingly so given the arguable greater attention that other brands receive, and a very simple way to hold and manage assets securely.

The KeepKey natively supports BTC, BCH, LTC, DOGE, DASH, ETH and BTG, plus ERC-20 token support for over 40 other assets. This is limited compared to Ledger and Trezor, and also excludes some notable assets currently available via the existing The amount of these also available on the new ShapeShift beta platform is limited still. It is in beta, however, and the team has confirmed they will continue to look at additional assets to include, though there is not a roadmap for this or anything they are ready to announce as yet. As they are all natively supported, however, it means transactions are far easier as there are no additional 3rd party wallets to have to deal with.

Once set up, I could then link the KeepKey with the closed beta platform access (using a combination of the KeepKey and platform screens for ease of use), which is linked to my ShapeShift member account. Once paired with the new platform, the existing KeepKey client is not required, though it can obviously still be used to manage assets outside of ShapeShift. It should be noted, however, that you can only run either the new ShapeShift platform or the KeepKey client at a time. The new integrated platform will eventually replace the existing KeepKey client too as the separate offerings become increasingly merged over time. I would, therefore, make the comparison that the old KeepKey client acts to link the old Ledger clients, and the new ShapeShift platform is more like Ledger Live, but with the integrated rather than third party exchange feature.

The only pain point I found with the KeepKey was how regularly it was disconnecting from the platform and had to be re-synced often. It occasionally showed a “memory fault detected error” alongside an error on the platform, and had to be unplugged and re-synced again. This is being constantly improved, however, and is now far less of an issue, though a minor inconvenience in any case.

The Platform

Moving on to the new beta platform, the UI is very clean, simple and user-friendly. There’s a clear navigation bar on the left-hand side, comprising of the following:

  • Portfolio/Dashboard View — comparable to Exodus.

Asset View — containing transaction history and generic price/volume data via ShapeShift’s CoinCap real-time data.

Trade View — utilizing the simple ShapeShift asset exchange process that customers have been used to, but now utilizing hardware wallet integration to manage to send and receiving directly from the same platform.

Settings View — detailing membership level limits and default preferences, plus the 0.05% Fox token (the new ShapeShift native asset) cash-back bonus on transactions similar to Binance’s reduced fee deal via BNB. You are also able to “forget” or “wipe” a paired KeepKey from here, meaning that transactions don’t have to permanently be connected to your account.

Support Link

The top navigation provides send and receive functions (verified by the KeepKey), as well as a “buy crypto” option for assets (powered by Wyre) with an impressive fee rate of less than 1%. The purchase option is currently only available for US customers, though the team has confirmed they are working on solutions for other countries too.

Completing the navigation tools on the top right is the KeepKey connection status/re-sync, and account management access.

The new beta platform is currently only available as a web version, though in discussions with their team, they will definitely be looking to provide desktop and mobile apps further down the roadmap, once the platform comes out of beta. The KeepKey integration is also wired only, so there’s no current Bluetooth functionality to take on the Ledger Nano X and Ledger Live offering, though again they are open to this in future.

The asset exchange minimum is commonly around $25 on BTC receive pairs, though much less on others. BTC sending fees are also set very high and there is no option for this to be set manually. The reasoning behind this as I understand it is to ensure that transactions are prioritised and confirmed as soon as possible (seemingly the next block in this case). It assumes that you are using it for speed only, however, and this may not always be the case. When exchanging BTC for something else via the platform, that may be more understandable, but just to send it elsewhere, the fee level is very high. As a result, fees can be as high as 10% on a $100 transaction and nearly 50% on a $10 transaction. This means the platform is not viable for smaller BTC transfers. I understand ShapeShift doesn’t control the BTC fees required, but they do decide to set a very high priority, without an option to change it. As a comparison, they are 5x more expensive than Coinbase on a $100 transaction and over 2x more expensive on a $10 transaction. This seems to actively discourage BTC transactions, so an option to set fees/priority would be good. That said, fees are low on alts and the platform is arguably more set up for that purpose.

Other than fees, the only other pain point I found, as mentioned, was how regularly the KeepKey was disconnecting from the platform and had to be re-synced often.

Transaction Testing

When testing receive transactions, it came up as pending straight away. Confirmation came in about 30 seconds for LTC transactions, though obviously this will vary by asset and block times. Receive transactions have an alert, reminding you to validate the address shown on the platform with the address shown on the KeepKey. This is not obvious, however, and could easily be missed. Having discussed this with their team, they are looking at making this more prominent to ensure users validate the addresses.

Send transactions were just as smooth, immediately displaying the pending transaction and priority confirmation depending on the asset, with a useful corresponding link to the blockchain transaction. This makes the transactions as fast as possible, though not the most cost-effective. The network fee for send transactions can take some time to show, however, slowing the process down somewhat. The send transaction process adds fees on top of the amount you want to send, rather than including them within it (like Coinbase, for example). As a result, you can be sure of the amount that will actually be sent to the receiver, rather than having to calculate what it will be after fees are taken, so you can adjust to send the correct amount required. Personally, I prefer this approach.

The trade/exchange feature to swap assets was very easy to use, securely signed and verified by the KeepKey, though not necessarily clear. Miner fees are displayed in the received asset rather than the send asset, in contrast to what is shown on the KeepKey. As a result, the send/receive/fee amounts quoted may not be accurate, particularly if the trade involves BTC, and especially if they are small level transactions. More on this later.

The exchange feature also provides Fox tokens that are earned for trades, effectively providing cashback or reduced fees depending on how you look at it.

The trade then goes into an “in progress” status, and you can close the window if you wish while you wait. Alternatively, it also has a “view progress” window, a bit like a pizza order tracker, to see what stage it’s at until it confirms. As above, you then also get a useful link to check the blockchain transaction and have successfully exchanged your assets.

You can request email transaction receipts and transaction history is available on the dashboard. There is not a download option as yet, though I believe this is coming once it’s out of beta.

What are they trying to accomplish?

As a consequence of the three themes mentioned earlier, the membership account, effectively an advanced loyalty program, was established alongside the integration of the KeepKey hardware wallet and CoinCap data tracking service, to deliver better pricing and superior user experience to easily manage and trade digital assets all in one place. A one-stop shop ultimately, if you will.

The details of the membership account were outlined as follows:

1. Members receive special benefits

  • Discount on exchange rates (Lvl 2+).
  • Volume-based rewards in FOX.
  • Higher transaction limits.

2. There are different levels of Membership (1–5)

  • Level 1 is available now and is free and open to everyone.
  • Levels 2–5 will be available later, and enable benefits on higher amounts of volume. Possession of specific amounts of FOX tokens (rather than spending or “burning”) grants access to these higher levels of Membership.

3. FOX tokens are standard Ethereum-based token. There will only ever be 1,000,001,337 FOX tokens in existence.

4. Membership benefits in various forms will accrue across all products and services of ShapeShift.

5. Membership requires basic personal information to be collected and became mandatory on October 1, 2018.

Does it solve a real problem?

Simply put, yes. There are definitely compromises here, but let’s be realistic. Not everyone is going to run their own nodes and use overly technical clients. This revolution has come this far with adoption from the more technically minded amongst us, and hard work from some of the most talented developers. These are smart people. The platforms that have been built, are most likely simple for them but are a struggle for many others. They are not necessarily UI experts, it’s a different skill set. As crypto absorbs more mainstream users as we move through the adoption curve, it becomes increasingly necessary for us to develop more user-friendly options for new participants that ensure we retain best practice and security, but in such a way that is as intuitive to people as using other apps. Over time, ease of use plus convenience will lead to increased mass adoption.

Further Analysis

The KYC requirement on accounts was a big change for ShapeShift and was not well received by some of their current users and the wider community. As users were in control of their own private keys, it had been compared to other non-custodial solutions. If they were purely non-custodial, KYC would likely not have been required. In reality, whilst it is predominantly a non-custodial solution, in order to exchange assets on the current and new platform, a small window of custody is required as assets are briefly sent to ShapeShift to manage the trade. Once complete, funds are fully in the users’ control again. In that sense, as discussed above, it is similar to a vending machine for example, where for a brief moment after paying and selecting, the machine has both your money and the product. Until the product is then delivered to you. However brief, this exchange period is still custodial and there will likely be no regulatory exemptions on the timescale of custody. It’s therefore logical and realistic that ShapeShift had to implement this process as a business with both a physical presence and users based in the US.

As mentioned, the KeepKey hardware wallet is required for the new platform for the time being, though they are working on further hardware integrations in the future. The current platform can also still be used without the KeepKey. It will ultimately be replaced by the new platform, but the team has confirmed they will be integrating the same functionality to exchange without a hardware wallet and process the transactions manually. as they are done now. At that point, users will then have the best of both worlds.

Ledger and Trezor arguably lead the hardware wallet market, certainly in terms of brand recognition. Broadly, I’d argue those two are comparable in terms of security, durability and asset support, however, Ledger has recently pulled ahead on the software front with the launch of Ledger Live and now the Bluetooth compatibility of the Nano X alongside a smartphone. The KeepKey stacks up well in terms of security and durability, and it’s also much easier to use. It has lower asset support, though it is continuing to explore adding more, those that it does are supported natively, so there is the convince of not needing additional 3rd party wallets too. The integration with this new ShapeShift platform, also now provides an alternative to the Ledger Nano X and Ledger live combo, leapfrogging current Trezor capabilities in that regard, albeit without the Bluetooth compatibility of Ledger as yet.

As a result, the KeepKey/ShapeShift combo provides the best current one-stop-shop non-custodial solution where convenience and simplicity are the priority and represents an excellent compromise solution for the real world. I’d still say the Ledger Nano/Ledger Live combo has the edge for those wanting more advanced solutions with greater asset availability, albeit it is slightly less user-friendly.

Asset support on the beta platform is also lower than the current offering. Understandable whilst in beta phase, but you would expect to at least reach parity with that for asset support by the time it comes out of beta, not to disappoint previous users.

Another bonus to the integration with the new ShapeShift platform is the ability to use it without the KeepKey, effectively in a read-only mode, allowing you to keep an eye on your assets very easily at any time without needing the hardware wallet or a third party portfolio app. This allows you to keep assets safely secured and only requires the KeepKey to sign transactions.

As we have covered, there were quite a few different connection/pairing issues between the platform and the KeepKey during testing for various reasons following various actions, as well as lagging data requiring refreshes. Whilst inconvenient, they were somewhat of a minor issue and continue to improve over time.

Another downside was the lack of clarity on fees and the very high costs on BTC transfers, disproportionately impacting smaller transactions. Granted, fees on other assets are nothing like this and reasonable. ShapeShift doesn’t control the miner fees for BTC either, but they do control the priority and therefore the fees they decide to pay in order to get the transaction through as quickly as possible. This makes sense for other assets, and perhaps even larger BTC transactions, but given the unique demand and miner fee structure for BTC, personally I’d prefer they let the user set the priority and hence the fees if the transaction is not urgent.

Further frustration was that when you first had access to the platform, you could check all assets in the trade section and look up potential fees and transaction minimums for potential exchanges you may want to make for those assets. As soon as you added cryptocurrencies, however, you could only look this up for the assets added.

It must be noted how receptive the ShapeShift team were and are to feedback. None of the issues I found were major, and all are being worked on either as a priority or for future iterations.


In all honesty, the new ShapeShift platform is one of the easiest platforms to use that I’ve come across in this space. Perhaps surprisingly, the KeepKey hardware wallet too. It’s often neglected in favour of the Ledger or Trezor products. Asset support is lower, and a disadvantage for some, yet they are continuing to look at expanding that. For quality, simplicity and user-friendliness however, the new ShapeShift and KeepKey combo are hard to beat.

It’s early days and there are certainly still kinks to iron out, but the platform is just in beta after all, and their team was very keen to resolve any issues discovered as soon as possible. It’s an impressive start, and for me, they are right up there in the race to provide one of the first integrated, non-custodial and user-orientated one-stop shops that the industry so desperately needs for continued adoption amongst current and potential users.

Disclaimer: Investing or trading in cryptocurrencies involves significant risk. It is important to research and carefully assess any such investments. All the information presented in this article does not constitute financial advice or recommendations of any kind.