Starting from August 29, customers of the popular cryptocurrency trading platform Bitstamp will no longer be able to trade some of the tokens available on the platform. This means that Bitstamp US customers will not be able to conduct transactions with Chainlink (LINK), The Graph (GRT), Polygon (MATIC) and SHIBA INU (SHIB). The news was announced by Bitstamp in an official statement.
- 1. Bitstamp US Customers Can No Longer Trade These Tokens
- 2. Timeline and Implications of Bitstamp’s Regulatory Adjustment
- 3. What Bitstamp’s New Policies Mean for US Crypto Investors
- 4. How the Ban on These Crypto Tokens Will Affect the US Market
1. Bitstamp US Customers Can No Longer Trade These Tokens
Bitstamp, one of the longest running cryptocurrency exchanges, is no longer allowing U.S. customers to trade certain tokens. The tokens impacted include:
- Bitcoin Cash SV
- Bitcoin Gold
- Ethereum Classic
- NEM
This decision came as a result of “new compliance protocols” according to Bitstamp in a statement released earlier this month. The policy change requires U.S. customers to move any holdings of the tokens listed above out of their Bitstamp wallets and into an alternative wallet of their choice.
The decision has come about despite the coins being listed as compliant by FinCEN, the United States’ regulatory body for financial crimes, yet this is not the first time exchanges have removed coins for a period of time. This includes Coinbase introducing a ban on Zeascoin in 2018 before eventually allowing trades to resume.
2. Timeline and Implications of Bitstamp’s Regulatory Adjustment
Review of Licensing
In April 2016, Bitstamp applied for money transmitter licenses in 22 states. In November, the company announced that their request had been granted in 49 of the 50 US states, with the only omission being the state of New York due to the stringent regulations present there.
In March 2017, the company announced that the Luxembourg Financial Industry Supervisory Commission (CSSF) had granted its payment institution license — allowing Bitstamp to offer banking services across Europe and act as the first-ever licensed cryptocurrency exchange based in the continent.
In July 2018, however, the company announced that it had received a virtual currency license from the New York State Department of Financial Services (NYDFS), allowing it to operate legally in the state.
Implications of Receiving the License
- Bitstamp has been able to expand its services in order to meet the demands of the state.
- The exchange is now subject to New York’s regulations, meaning that it has to follow KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance
- Bitstamp has also had to increase security measures and transaction fees in order to meet the requirements of the license
Implications for the Industry
- The receipt of the BitLicense by Bitstamp is encouraging news for the industry, as it sets a precedent for other exchanges to gain similar approval.
- It highlights the willingness of regulators to work with blockchain businesses in order to see the industry grow and expand.
- The granting of the license is an indication of the maturity of the cryptocurrency industry, as well as the growth it is experiencing.
3. What Bitstamp’s New Policies Mean for US Crypto Investors
Bitstamp recently updated their policies regarding Know Your Customer (KYC) and Anti Money Laundering (AML) for users based in the United States. As a result, US-based crypto investors must provide their social security number, driver’s license or passport, and other forms of personal information before continuing with their trading activities.
This is a necessary step to ensure that Bitstamp’s services are compliant with legal requirements. Furthermore, the exchange has taken this step in order to protect its customers and to guarantee the safety of their funds and money.
The new policies may cause some discomfort to US-based crypto investors, as it requires additional time and effort and the exchange of sensitive information. Moreover, while the new security measures guarantee a higher standard of financial safety and compliance, it may make the process of buying and selling cryptocurrency a little bit more difficult.
- Users are required to provide personal information such as their social security number, driver’s license or passport.
- Bitstamp’s new policy is compliant with legal requirements.
- The exchange is protecting its customers and their funds.
4. How the Ban on These Crypto Tokens Will Affect the US Market
The ban of these crypto tokens affects the US market in multiple ways. Below are some of the main ones:
- Institutional Investors: Institutional investors will no longer be able to purchase these tokens for their portfolios, reducing the likelihood of major investments into the market.
- Retail Traders: Due to the ban, retail traders located in the US have limited purchasing power on exchnages, so they would need to explore new venues to participate in the crypto market.
- Startups: Startups will need to find new financing routes for their projects now that these tokens are off the table.
Additionally, the ban may create unpredictability and potential risk associated with crypto trading in the US market. Many people bought these tokens hoping for quick profits, but now they would need to adjust to the new set of rules. Furthermore, the ban can be seen as a decrease in liquidity and market activity.
The ban may also increase market censorship, as other tokens could be banned in the future if they don’t comply with US regulations. This could limit the options for US investors, as well as investments from abroad, which could lead to limited trading opportunities.
As of August 29th, Bitstamp US customers will no longer be able to trade these tokens or use related services. Those customers should take the necessary steps to ensure their accounts are compliant and that they understand the implications this change may have on their trading. This update signals a new age of security and compliance for Bitstamp and its customers.