Bitstamp

Bitstamp
Type Bitcoin exchange
Location London, Luxembourg;[nb 1][1] Slovenia
Key people Nejc Kodrič (CEO and co-founder), Damijan Merlak (member of the management board and co-founder)
Currency Bitcoin, XRP, Litecoin, Ethereum, Bitcoin Cash
Website www.bitstamp.net
Bitstamp logo (2013-2017)

Bitstamp is a bitcoin exchange based in Luxembourg. It allows trading between USD currency and bitcoin cryptocurrency. It allows USD, EUR, bitcoin, litecoin, ethereum, ripple or bitcoin cash deposits and withdrawals.

The company was founded as a European-focused alternative to then-dominant bitcoin exchange Mt. Gox.[2] While the company trades in US dollars, it accepts fiat money deposits for free only via the European Union's Single Euro Payments Area, a mechanism for transferring money between European bank accounts.[1] Deposits via credit cards or wires incur a fee.[3]

Bitstamp offers an API to allow clients to use custom software to access and control their accounts.[4]

History

The company is headed by CEO Nejc Kodrič, a widely known member of the bitcoin community, who co-founded the company in August 2011 with Damijan Merlak in his native Slovenia, but later moved its registration to the UK in April 2013, then to Luxembourg in 2016.[1][nb 1] Bitstamp outsourced certain operations to the UK due to the lack of adequate financial and legal services in Slovenia.[2]

When incorporating in the United Kingdom, the company approached the UK's Financial Conduct Authority for guidance, but was told that bitcoin was not classed as a currency, so the exchange was not subject to regulation.[1] Bitstamp says that it instead regulates itself, following a set of best practices to authenticate customers and deter money laundering.[1] In September 2013, the company began requiring account holders to verify their identity with copies of their passports and official records of their home address.[1] In April 2016, the Luxembourgish government granted a license to Bitstamp to be fully regulated in the EU as a payment institution, allowing it to do business in all 28 EU member states.[5]

In December 2016 Bitstamp started a public funding campaign on the BnkToTheFuture investment website.[6] In July 2017, Swissquote partnered with Bitstamp to launch bitcoin trading.[7]

In 2017 Chicago Mercantile Exchange has created the CME CF Bitcoin Reference Rate (BRR) which serves as a once-a-day reference rate of the US dollar price of Bitcoin. This price is set through Bitstamp, GDAX, itBit and Kraken.[8]

Service disruptions

In February 2014, the company suspended withdrawals for several days in the face of a distributed denial-of-service.[9][10][11] Bitcoin Magazine reported that people behind the attack sent a ransom demand of 75 bitcoins to Kodrič, who refused due to a company policy against negotiating with “terrorists”.[12] Days after restoring service, Bitstamp temporarily suspended withdrawals for some users as a security precaution due to increased phishing attempts.[13]

In January 2015, Bitstamp suspended its service after a hack during which less than 19,000 bitcoins were stolen,[14] reopening nearly a week later.[15]

Notes

  1. 1 2 The company is registered in Reading in the UK, but this is in fact just the offices of UK PLC, a company specialising in company formation and which, amongst its services, allows companies to use its own address as their registered office, effectively acting as a forwarding address. There is no clear information available as to where Bitstamp's operations are located or whether they actually have any presence at all in the UK, or are still run out of Slovenia.

References

  1. 1 2 3 4 5 6 Boase, Richard; Spaven, Emily (2013-11-22). "Bitstamp shows higher Bitcoin price than Mt. Gox". CoinDesk. Retrieved September 5, 2018.
  2. 1 2 Hill, Kashmir (26 June 2014). "The Bitcoin Economy's 'Backbone' Is Bitstamp, An Exchange Run By Two Young Slovenians". Forbes. Retrieved 5 January 2017.
  3. ↑ https://www.bitstamp.net/fee_schedule/
  4. ↑ "API – Bitstamp". Bitstamp. Retrieved 2014-02-21.
  5. ↑ Metz, Cade (25 April 2016). "A Bitcoin Exchange Just Got Approval to Operate Across the EU". Wired. Retrieved 5 January 2017.
  6. ↑ https://www.bitstamp.net/article/bitstamp-opens-online-investment/
  7. ↑ "Online Bank Swissquote Partners With Bitstamp to Launch Bitcoin Trading - CoinDesk". CoinDesk. 2017-07-14. Retrieved 2017-11-17.
  8. ↑ "Bitcoin on CME: Interview With Bitstamp CEO Nejc Kodrič". Cointelegraph. 10 November 2017.
  9. ↑ Kharif, Olga (12 February 2014). "Bitcoin Exchange Bitstamp Halts Customer Withdrawals". Bloomberg. Retrieved 5 January 2017.
  10. ↑ Spaven, Emily (2014-02-14). "Bitstamp to resume Bitcoin withdrawals today, BTC-e still working on a solution". CoinDesk. Retrieved 2014-02-19.
  11. ↑ Pagliery, Jose (12 February 2014). "Another Bitcoin exchange goes down". CNN. Retrieved 5 January 2017.
  12. ↑ Alisie, Mihai (2012-10-15). "Bitstamp under DDoS". Bitcoin Magazine. Retrieved 2014-02-21.
  13. ↑ Hajdarbegovic, Nermin (2014-02-20). "Bitstamp restores withdrawals following security scare". CoinDesk. Retrieved 2014-02-21.
  14. ↑ Zack Whittaker (5 January 2015). "Bitstamp exchange hacked, $5M worth of bitcoin stolen". Zdnet. CBS Interactive. Retrieved 6 January 2015.
  15. ↑ Ember, Sydney (9 January 2015). "Bitcoin Exchange Bitstamp Resumes Services". The New York Times. Retrieved 5 January 2017.
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