Exchange Review: Bitstamp

Bitstamp
  • Editor Rating
  • Rated 3 stars
  • 60%

  • Bitstamp
  • Reviewed by:
  • Published on:
  • Last modified: February 14, 2015
  • Trades
    Editor: 65%
  • Funding
    Editor: 55%
  • Compliance
    Editor: 55%
  • Platform
    Editor: 76%
  • Help & Support
    Editor: 50%

Bitcoin exchange Bitstamp was originally founded in Slovenia in 2011, and is currently registered in the United Kingdom.

Trades

Bitstamp is one of the biggest Bitcoin exchanges to date, although its market share has been decreasing recently. Its fee structure is said to have fallen behind on competitors, and with a trade fee of 50 basis points by default that should not be surprising. It is not very high, but many competitors will execute a trade for less than half of Bitstamp’s fee percentage. It does not help either that there are only limited cryptocurrency pairs to trade in, as only Ripples can be traded besides Bitcoin. That Bitstamp is still one of the biggest Bitcoin exchanges regardless becomes apparent when looking at the order book. The difference between the best bid and ask prices for BTC/USD is roughly 20 basis points, which is in line with market leader OKCoin. Furthermore, the exchange gives users good control over their trades by supporting advanced order types.

Funding

The possibilities for funding an account with fiat currencies are as limited on Bitstamp as they are for most other exchanges. Users in the countries that belong to the SEPA area are lucky, as they can fund their account at relatively low costs. International users will have to make use of expensive wire transfers, with a minimum fee of $15. Both methods are slow and may take several (2-5) business days to be processed. SEPA transfers are typically faster, but also have to go through an additional step as all currencies are converted to USD which can cause a delay up to one day.

Compliance

Bitstamp was originally founded in Slovenia in 2011. It later moved to the United Kingdom, where it has been incorporated per July 2012 under company number 08157033. It is uncertain whether it is actually operated from this new location. The company requested an approval from the Financial Conduct Authority (FCA) in 2013, but has not received any so far meaning it still operates without a financial license. The FCA was unable to approve, as it had no power to do so under the current regulatory framework in the UK. The British government has formally only just started examining the digital currency, and the question whether it should be regulated in the future. The exchange did provide a public Proof of Reserves in May this year, but some community members already consider this outdated and are requesting a new audit.

It should be realized that a Proof of Reserves audit is far from a full professional audit, and does not provide any relevant information with regard to, for example, security policies and system quality. Such a full audit is not likely to happen before the industry gets more regulated, as that is required to assure the quality of these audits as well as a level playing field for all participants. For now the current limited (Proof of Reserves) audits at least show whether an exchange is willing to be compliant and transparent.

Platform

Most cryptocurrency exchanges excel in design and usability, and Bitstamp is no exception. When it comes to this area, limited cryptocurrency pairs to trade in also help in keeping the platform clean and simple (although the one does not exclude the other). One helpful detail is that users will always get a reminder to enable two-factor authentication upon logging in. The website has a responsive design, making it better accessible from mobile platforms. An official app was, however, not found.

Help & Support

Bitstamp provides the most extensive information on the question “what is Bitcoin?” as it makes up almost half of the help content. Strangely, this section seems to be devoted to praising Bitcoin rather than providing fair information. The advantages of Bitcoin over regular currencies and gold are listed, but the disadvantages are nowhere to be found. At the same time, any risks are hardly disclosed and not even the high volatility inherent to Bitcoin is mentioned. The few risks that are mentioned are immediately debunked. It must be said a better risk disclosure is present on the exchange, somewhat hidden under the “about us” and policies section, but there is no good reason to keep this separated.

The remainder of the FAQ is more focused on the exchange’s functionalities, and covers these rather briefly. Stop loss orders are not even discussed while limit orders are. Overall it does seem sufficient to covers the basics. For any additional support the exchange can be contacted via email through its ticket system.

 

  • Jens Hansen

    I got this message. #3:Bye Bye Bitstamp

    we have received your gold withdrawal request and instructed our payment department to further process it. You will receive an e-mail notification as soon as the process is successfully concluded.

    However, as our compliance department requires some additional due-diligence information, we will have to kindly ask you to help us better understand the nature of your relationship with Bitstamp. In order to do so, we require that an additional KYC (Know Your Customer) procedure is completed before are able to further process your future transfers.

    We kindly ask you to send us a high resolution image of both pages of your international passport and answer the following KYC questionnaire:

    1. How did you learn about Bitcoin?

    2. What is the purpose of trading on Bitstamp? Please describe in as much detail as possible how you use your trading account.

    3. What is the origin of the bitcoins deposited to your Bitstamp account? Please provide supporting documentation which confirms how bitcoins have been acquired.

    4. What are your future plans and activities planned on our exchange?

    5. Do you plan more withdrawals in the future?

    6. Which bank do you indent to use? Please provide the complete address and SWIFT code.

    7. Estimated amount that you would be depositing/withdrawing to/from your Bitstamp account per month (in USD and BTC)?

    8. Are you using your Bitstamp account in connection with any businnes / commercial related activity? If so, please clarify in detail how.

    If you have any questions, please feel free to ask.