Bitstamp (bitstamp.net) is one of the largest bitcoin exchanges, and indeed, one of the first regulated exchanges of the European crypto currency market. They are quite popular in many countries, especially in the United States, Germany, the UK, Spain and Italy. The operation is apparently focused on keeping its business model as simple as possible: it supports three digital currencies, Bitcoin (BTC), Litecoin (LTC) and Ripple (XRP), and two fiat currencies, EUR and USD. Despite the simplicity of the approach and the regulated nature of the exchange, the user feedback regarding their services is less than stellar, to say the least.
Before we get into that though, let’s take a closer look at what Bitstamp offers under ideal circumstances. The exchange supports market orders as well as advanced orders, but it doesn’t feature derivatives and margin trading. That isn’t exactly a shortcoming though: both of those instruments are high-risk ones, which open up new scamming avenues and generally more opportunities for abuse.
The Bitstamp website doesn’t make any unrealistic promises, nor does it entice its customers to join various bitcoin mining schemes. The About Us section gives a detailed picture of who we’re dealing with on a corporate- as well as personal level. Founded in Slovenia in 2011, Bitstamp is currently registered in Luxemburg, where the financial authorities have granted it a Payment Institution License.
The main headquarters of Bitstamp Ltd. is located in London, at 5 New Street Square, EC4A 3TW, UK. The company has offices in several other locations too though. In Luxemburg, the corporate entity behind the operation is BitStamp S.A, and it’s headquartered at 10 rue Antoine Jans, L-1820, Luxembourg. The operation has a corporate presence in the US as well: Bitstamp USA Inc. is located at 99 Hudson Street, 5th Floor, New York.
The CEO of Bitstamp and its face is Nejc Kodric. He’s seconded at the helm of the operation by Chairman Dan Morehead and fellow Director Damijan Merlak. The main investor behind the Bitstamp brand is PanteraCapital.
It is obvious that in this regard, Bitstamp don’t have anything to hide. Their corporate background looks clean and they’re willing to share information. Let’s not forget that Bitstamp are also licensed and regulated.
Bitstamp submitted its application for a Payment Institution License to the Luxemburg authorities in 2014. In 2016, they were finally granted the license, officially entering the regulatory fold of the EU. The issuer of the said license is the Luxemburg Ministry of Finance, while the regulatory authority is the Luxemburg Financial Industry Supervisory Commission. What this licensing deal means for the operator is that it has to fulfill a series of strict requirements, like the implementation of a series of anti-money laundering procedures, it has to submit monthly financial reports and it needs to have a mandatory internal auditor. All these requirements are supposed to make the exchange safe and trustworthy for its users as well for the authorities under whose jurisdiction it operates. Despite fulfilling all these factors, Bitstamp seems to fall well short of the mark when it comes to the test of user feedback.
The Bitstamp website is by no means a new one and it has plenty of domain authority too. Scores of high-profile crypto currency sites link to it, so there are no problems in this regard either. The organization which has registered the URL is Bitstamp Europe S.A., and the registrant data is public, including the above disclosed Luxemburg address.
Bitstamp User Feedback
Despite the fact that it has thus far checked all the right boxes legitimacy-wise, Bitstamp has some issues when it comes to customer satisfaction. To make a long story short: the majority of user feedback available about the service is – quite surprisingly – negative. Complaints range from alleged lack of professionalism on the part of the exchange, to trading platform-related issues and malicious intent.
One person for instance has complained about how the exchange got him hooked, by handling his first $1,000 deposit very professionally. Subsequently, he allegedly made a much more substantial deposit, which got lost along the way somewhere, with the exchange never admitting to having received it.
Others users have brought up the jurisdiction of the operation (Luxemburg) as a negative (essentially alleging tax-dodging and lax regulation-shopping on the part of the operator). Still others have slammed the service as expensive, unfriendly, with a buggy trading platform.
Obviously, such feedback always needs to be taken with a grain of salt, as there may be competitors out there fanning the flames in this regard, but it does indeed have to be considered, especially when there are barely any positive user reviews out there to act as a counterbalance.
Bitstamp support has been slammed as well, and this issue has indeed been admitted by site officials too. Apparently – for the time being – the operator simply doesn’t possess the resources to offer a proper service in this regard.
The verification process has also been called way too tedious and the support staff assisting with it unhelpful and unfriendly. Perhaps the worst allegations are aimed at Bitstamp’s past security failures. According to some users, the exchange was hacked, on one occasion after system administrator Luka Codric made the uninspired choice to open an email attachment, from a message sent by a group he thought was seeking Bitstamp’s membership.
Such issues could in fact result in the loss of user funds, thus explaining the theft-related complaints.
Customers from certain jurisdictions (Canada) are apparently completely ignored at Bitstamp. While the operation does indeed seem geared towards an EU-based clientele, such practices are just plain unprofessional.
Bitstamp Review Conclusion
Bitstamp makes a peculiar case indeed. Scam test-wise it seems to tick all the right boxes, but the downright abysmal user feedback makes all that quite redundant. Still, it would certainly be a mistake to just proclaim it all a scam. The exchange doesn’t seem to act in bad faith at all, but its apparent lack of professionalism can indeed have major negative repercussions.
To be on the safe side, we recommend to AVOID using Bitstamp.
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