Founded in Slovenia in 2011, Bitstamp is one of the oldest firms operating in the nascent market for digital assets. The platform allows trading between USD and Bitcoin as well as facilitating USD, EUR, Bitcoin, Litecoin, Ethereum, and Ripple cash deposits and withdrawals.
Bitstamp was created in a garage with 1000 Euro and two basic laptops by Nejc Kodrič and Damijan Merlak who envisioned an alternative to the then dominant Bitcoin exchange Mt. Gox. Nejc studied Organization and Management of Information Systems and Economics while Damijan started working professionally as a software developer in college. Despite its humble beginnings, the company raised $10 million in seed funding from Pantera Capital, the first United States Bitcoin investment firm.
Bitstamp was the first exchange to offer a multisig online Bitcoin wallet (which requires two of three signatures to authorize transactions) and the first to implement know-your-customer requirements across its user base.
Bitstamp moved its registration to the UK in April 2013. A few years later in 2016 it moved to Luxembourg where it was granted a payment institution license, making it the first nationally licensed Bitcoin exchange in the world. The licence extended to cover all 28 EU member countries, making blockchain history.
Initially the exchange focused almost exclusively on European markets, but in 2019 it secured a much-coveted BitLicense; making Bitstamp USA the nineteenth firm to receive a green light to conduct digital currency operations in New York state, where it also now has offices.
In January 2015, Bitstamp suspended its service following a hack during which 19,000 Bitcoins (about $5.1 million) were stolen. The breach represented a small fraction of Bitstamp’s total reserves, the overwhelming majority of which were held in secure offline cold storage systems.
Shortly after discovering the attack, Bitstamp made the expensive decision to rebuild its entire trading platform and ancillary systems from the ground up, rather than trying to reboot its old system. In 2019 Bitstamp received a C+ security rating from analytical agency ICO rating.
Attributing its longevity and success to its lean operation model, in October 2018 Bitstamp was acquired by a European-based investment firm for an undisclosed amount in an all-cash deal.Read More