What is Shakepay?

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robertstevens

Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.

Shakepay is a Canadian crypto brokerage service that lets you buy and sell Bitcoin and Ethereum without paying trading fees. As of May 2021, the service boasted 600,000 Canadians on the platform. Shakepay is growing quickly: Just two months earlier, it hit 380,000 Canadian users.

The catch is that Shakepay sets the prices. It bumps up the price of Bitcoin and Ethereum it sells to customers and lowers the price at which Shakepay will buy those cryptocurrencies from customers. An example on its site explains that if you buy $12,900 worth of cryptocurrency, you can sell it right back to Shakepay for $250 less.

While this is a clear disadvantage to trading on exchanges like Binance, which let you buy at the market price from other customers and take a fee of up to 0.1%, Shakepay would venture that its other advantages justify the cost. It lets customers buy and sell cryptocurrency very easily, send cryptocurrency to friends, and deposit and withdraw via Interac e-Transfers and wire transfers.

In the complicated world of crypto finance, simple services like Shakepay are valuable for customers new to the space—but they will pay for the convenience. Shakepay said in a June 2019 blog post that it intends to reduce this spread as the company grows.

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What is Shakepay?

Shakepay was set up in Montreal in 2015 by CEO Jean Amiouny and CTO Roy Breidi. Both Amiouny and Breidi graduated from McGill University. Amiouny graduated in 2013 and then headed to Dubai as a business analyst for Booz & Company for a year, while Breidi graduated in 2012 and then worked in wealth management technology for Morgan Stanley for three years.

The company has received $786,500 in funding since 2015 from Bogaroo, Boost, Box1, and Creative Destruction Lab, according to data from Crunchbase.

You can buy just two cryptocurrencies on Shakepay: Bitcoin and Ethereum. Bitcoin, founded in 2008 by the mysterious Satoshi Nakamoto, is the original cryptocurrency. As of August 2021, it has a market cap of $843 billion, making it the largest cryptocurrency by that metric. Ethereum was founded in 2015 by a group of software developers, chief among them then-teenager Vitalik Buterin. Ethereum is now the second-largest cryptocurrency, with a market cap of $364 billion.

There are thousands of cryptocurrencies—other top ones include Dogecoin, Cardano, and Polkadot—each of which contribute to the overall market cap for cryptocurrencies of $1.88 trillion. Shakepay does not support most of these coins; other exchanges, like Binance or Huobi, do.

How do you buy and sell cryptocurrencies on Shakepay?

To buy cryptocurrencies on Shakepay, you’ll first have to set up an account. Shakepay will first request information about your identity, including your name, address, date of birth, and phone number, and cross reference some of this data with credit bureau databases.

Shakepay might request further information, like a selfie video or an image of a photo ID. Shakepay says that customer data is kept encrypted and that it complies with Canada’s Canada’s Personal Information Protection and Electronic Documents Act, and Quebec’s Act Respecting the Protection Of Personal Information in the Private Sector.

Once you’ve signed up, you’ll have to deposit funds in order to buy cryptocurrencies. There are two ways to buy cryptocurrencies on Shakepay. The first is with the other cryptocurrency: You can buy Bitcoin with Ethereum and vice versa. The second is with Canadian dollars, through wire or Interac e-Transfers.

Shakepay doesn’t charge you for any of these methods, but some deposit methods might cost you money regardless. Shakepay says that Interac e-Transfers should be available in minutes but that some banks delay transfers by up to an hour. e-Transfer transactions are limited to $5,000. Wire transfers take 1-2 working days and banks might charge money for sending these transactions.

Shakepay estimates that Bitcoin deposits take 20 minutes to arrive and Ethereum deposits take an hour, but this is dependent on the state of the network—it could take much longer at times of great network congestion. Shakepay doesn’t charge for deposits of cryptocurrencies but you must pay the “network fee” necessary to send cryptocurrencies between wallets. Again, this is highly dependent on the state of the network; it could cost as little as a few dollars but fees have spiked higher than $50 on peak trading days.

Once you’ve added your funds, it’s time to buy your crypto. To do so, click on the “Buy & sell” button on the main dashboard, then select the currency you’d like to buy and the currency you’d like to buy it with. Shakepay will quote you a price. Remember that although Shakepay doesn’t charge for this transaction, this price will likely be more expensive than a price quoted on a regular cryptocurrency exchange, where you trade with other users rather than the brokerage itself.

To sell, you do the same but in reverse. If you sell your cryptocurrencies for Canadian dollars, you can cash out through e-Transfers or wire transfers, both of which are free. Of course, you might not want to sell straight away. You can do lots of things with your cryptocurrencies if you choose to hold onto them. You can HODL, which is crypto-speak for “hold”—wait until the price rises to a point at which you’re happy to sell, and bear the risk that it could decrease.

You can also send your crypto to other friends using their Shakepay username. And finally, you can send your crypto to an external wallet. You might want to do this to stake your ETH in a lending protocol or business on another platform, to buy a piece of NFT crypto art, or to sell it on another exchange. Shakepay, unlike most other cryptocurrency exchanges, will cover the network fee you’d usually have to pay to send cryptocurrencies to other wallets.

What other services does Shakepay offer?

The company also runs a “shaking” programme, whereby you can earn free Bitcoin each day by shaking your phone. These rewards compound if you keep building your streak, from 100 satoshis (the smallest denomination of Bitcoin) on day 1 to 1,000 satoshis on day 1,000. Keep in mind that this isn’t likely to make you rich anytime soon: There are 100 million satoshis to a Bitcoin.

A greater financial incentive is Shakepay’s referral reward, which pays out $10 CAD if the person you referred today bought $100 CAD of Bitcoin or Ethereum within a month of signing up. This reward has occasionally increased to $30 CAD during the holidays. The process can be repeated for each person you sign up.

In April 2021, Shakepay announced the Shakepay Card, a Visa card that offers Bitcoin cashbacks on all purchases. “All bitcoin cashback will be settled to your Shakepay bitcoin balance and will be separate from your Shakepay card balance,” it said in its blog post. Shakepay offered a Bitcoin debit card years ago but scrapped it after its issuer “experienced some issues,” according to Coindesk. In 2018, Shakepay moved to the Bitcoin buying and selling services in place today.

In adddition to servicing individual investors, Shakepay lets certain Canadian businesses sign up. Corporations, partnerships, trusts and non-profit organizations are all eligible to apply for business accounts. Companies will need to provide additional information to get their accounts verified, including articles of incorporation, a statement from the board of directors, proof of address, the driver’s license of the company director, and a signed document detailing the shareholder structure of the company.

Is Shakepay safe and regulated?

Since August 2020, Shakepay has insured the cryptocurrencies it holds in offline storage through a policy issued by Aon and underwritten by Lloyd’s of London. This policy covers “most damages, theft, and loss of private keys.” Shakepay hasn’t disclosed which companies hold its cryptocurrencies, and it is unclear when cryptocurrencies are sent to offline “cold” storage, but the CEO told Coindesk in August 2020 that most assets aren’t held for very long.

Shakepay has previously hired blockchain forensics firm CipherBlade to independently audit its reserves and securities policies. The audit said that there was “a 100% match between transaction data found in backend systems and amounts credited to user accounts” relative to the transactions they tracked on the Bitcoin and Ethereum blockchains and bank account records. The report also found that any cryptocurrencies held in hot and cold wallets (online and offline wallets) “are unlikely to be compromised,” in part because Shakepay “performs background checks on all employees working at the company.”

Shakepay is registered with FINTRAC as a virtual currency dealer and as a transfer service provider. In Quebec, it’s registered with the AMF. It’s licensed to operate in all of Canada’s provinces and territories—even in Ontario, whose securities regulator has cracked down on unregistered exchanges. In an update in July 2021, Shakepay said that new FINTRAC regulation that went into effect on June 1, 2021, will mean that it might request more information from its customers. However, in the long-term, Shakepay expects that it’ll be “able to offer more services to our customers.”

Last Updated September 7, 2021

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