We Are Still Early (Interview)

Bitstamp is among the veteran crypto exchanges, working since 2011. It’s a European-focused platform based mostly in Slovenia, with its headquarters in London, England — and serves the USA and lots of different nations as properly.

CryptoPotato an opportunity to fulfill up with Jean-Baptiste Graftieaux (JB for brief), the company’s international Chief Executive Officer (CEO). He has held management roles in conventional finance, fintech, funds, and eCommerce – in addition to cryptocurrency. He turned the worldwide CEO of Bitstamp in May 2022 – earlier than that, he was serving because the CEO of Bitstsamp Europe.

At the Paris Blockchain Week Summit, Graftieaux shared with us the story of the early days of Bitcoin (“in 2011, the only way to buy BTC in Europe was by sending money to Japan”), the big development of Bitstamp (“we were 8 in 2014 and now 570”), how Bitstamp picks which cryptocurrencies to checklist on their alternate, and the institutional development (“we are still early”).

The Days When You Could Buy BTC Only in Japan

Many folks want that they had purchased Bitcoin again within the early days when costs had been within the vary of some cents. However, whereas we’re at present used to with the ability to purchase BTC as simple as placing your bank card particulars again in 2011, it was completely different story – in keeping with Graftieaux.

“Back in 2011, when you wanted to buy crypto in Europe, you had to send your money to Japan. The two founders (of Bitstamp), Nate and Damian, 20 years old at the time probably, their idea was, ‘Let’s give crypto access to European users, not going to Japan, but with a European platform, European bank.’ So overnight they put together Bitstamp.”

Three years later, Bitstamp was nonetheless a startup enterprise, however immediately it’s an unlimited international operation with a billion {dollars} a day price of crypto commerce quantity.

“I joined the company in 2014. We were just eight people at the time. It was still a startup. It was in the garage. But nevertheless the market has evolved significantly over the last six to eight years. Now we have 570 employees over in Europe, in the US, in APAC [Asia-Pacific] as well.”

The First European Regulated Crypto Exchange

Along with that a lot buying and selling quantity comes the compliance duties for Graftieaux and his group to handle in collaboration with nationwide regulatory authorities:

“The DNA of Bitstamp is to be a trusted company. Very early in the process we became regulated – in 2016. We were the first exchange to be regulated in Europe. Then after in the US, and very soon after that in APAC. But that’s part of our DNA. That’s why we are very, very strong with institutional clients, banks, and payment service providers— but also 5 million retail [users].”

Today Bitstamp stays a high 10 cryptocurrency alternate, however JB nonetheless remembers the times they had been processing solely $20 million in a day – a quantity that has grown to billions. He additionally shared that that they had 15,000 shoppers again in 2014, whereas now they’ve over 5 million.

It’s a totally completely different story, a totally completely different ecosystem.”

Today Bitstamp facilitates liquid alternate markets for all kinds of cryptocurrencies, together with Bitcoin (BTC), Ether (ETH), Tether (USDT), USD Coin (UDC), Ripple (XRP), Cardano (ADA), and dozens of others.

The company’s work is one in all Slovenia’s biggest exports and claims to fame, says Graftieaux:

“Interestingly the company is still in Slovenia where it was founded. We have offices in Luxembourg, Amsterdam, New York, and Singapore. Out of the 570, probably 450 people are in Slovenia. Bitstamp in Slovenia — it’s like Apple in the US. Everybody wants to work for Bitstamp.”

In latest years there’s been an increase in cyberattacks on cryptocurrency firms and customers. It’s paying homage to the early days when crypto first rose to prominence as a significant bounty on-line for cybercriminals.

Bitstamp is one in all three exchanges, Graftiaux tells us, that retains a U.K. SOC 2 audit/certification for info safety:

“We have an InfoSec or CISO [chief information security officer]  group internally with tons of expertise. And what we do to consolation us and to consolation the ecosystem is that we’re audited, and now we have the upper certification by way of IT safety, which is a Soc 2 report.

I feel now we have solely three exchanges on this planet with that sort of audit or certification. So for us it’s outsourcing to respected very, very stable companions, and on the similar time, getting this validation that we’re set of the artwork by way of safety.”

Bitstamp has notably stayed out of the information over incidents or safety breaches for the final eight years. The CEO mentioned that out of the roughly 300 cryptocurrency exchanges working immediately, he doesn’t assume there are greater than 20 totally regulated exchanges. He believes that specializing in compliance first, then build, versus build first, ask questions later has been a key ingredient to Bitstamp’s endurance.

‘Exchanges List Everything’

He says one other side of that’s high quality management within the selection of buying and selling pairs on the alternate. There are fewer cash to commerce in comparison with among the alternate’s newer opponents. That could possibly be a excessive reward alternative for holders, but additionally with the trade-off of upper threat.

One of Bitstamp’s standards for high quality is liquidity:

“We wish to guarantee when our shoppers wish to purchase the coin — there may be coin on the market, there may be coin on the platform. That after they wish to promote, we wish to ensure there’s a purchaser. Otherwise there isn’t a transaction.

What now we have seen on the opposite exchanges is that they are going to be itemizing the whole lot, each sort of coin. You purchase the coin, however sooner or later once you wish to promote, there isn’t a one— and the value is dropping. You lose all of your money, mainly. So by way of shopper status, that is unhealthy. We assume it’s very unhealthy. So for us the primary level is we wish to guarantee there’s liquidity on the platform.”

The second criterion is the group behind the crypto or token. The CEO defined that they’re extraordinarily selective as a result of they wish to ensure that if customers purchase a cryptocurrency – “there is a business plan, there is a team behind it, there is knowledge, there is IT security – that this coin will stay for the next 20 years, 50 years – forever.”

On Institutions: We Are Still Early

Speaking of that sort of longevity, Graftieaux advised us he thinks we’re nonetheless early by way of institutional gamers making large investments in cryptocurrency.

While many institutional traders are starting so as to add crypto to their holdings — particularly within the U.S., the place a extra clear regulatory framework has begun to emerge — the Bitstamp CEO thinks there’s nonetheless large development that we haven’t seen but coming. Here’s the timeframe he guesses:

“The method to take a look at it’s that the ecosystem is just 12-years-old. From 2009 to 2016, it was the Wild West: no regulation, no greatest practices, no legislation, no mediation in any respect.

We performed by the e-book, by the very best practices on the time. Now it’s very fragmented. The US has a really clear regulatory framework. In Europe it’s much less clear, however it’s coming.

At the second, it’s extra like a regulatory puzzle, with the VASP, the Virtual Asset Service Provider. This implies that we’re in a transition section, which implies that establishments are making ready themselves for the following wave, which can come after… let’s say 24 months roughly. Hopefully 24 to 30 months. So is it nonetheless early? I feel it’s nonetheless early. There’s been development, however the large one is coming.”