Anyone Think Bitstamp is Insolvent? Possible BTC Price Drop Incoming?

[lyth0s]

Found this today, seems although Bitstamp is making it EXTREMELY difficulty to withdraw both BTC and Fiat currency. Seems like a Mt. Gox 2.0 problem. If they end up being insolvent do you guys think BTC price will increase (due to realized less supply of coins) or go down due to bad media coverage plus people trying to recoup some of their losses?

http://www.reddit.com/r/Bitcoin/comments/26apno/bitstamp_will_not_process_withdrawal_unless_you/

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. The purpose of trading on Bitstamp? Please describe in as much detail as possible how you intend to use your trading account. 3. What is the origin of the deposited Bitcoins? If mining, please specify your hardware specifications and submit a receipt or an invoice for your mining equipment. 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 intend 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)?

We kindly ask you to submit your answers and documents in a reply to this ticket.

OK fine, here are the details and my passport (already verified with driver's license and had swift code already entered).

They required that I prove where the coins came from that I sold. I provided the receipt from the exchange. Here is what they came back with.

Thank you for your reply.

Please note that the provided information is for only 5 BTC while you have deposited to and sold on Bitstamp more than xxx bitcoins.

We kindly ask you to send us a signed message of your personal, most used wallet so we can establish the veracity of your statements.

some people may bring about their recent "proof of solvency" of Bitstamp by firestartr.co (whoever the hell that is). It is just a statement though, no blockchain proof. And the PDF is even broken on my PC

https://www.bitstamp.net/s/documents/Firestartr_DD_Letter_for_Bitstamp.pdf

[ranlo]

Found this today, seems although Bitstamp is making it EXTREMELY difficulty to withdraw both BTC and Fiat currency. Seems like a Mt. Gox 2.0 problem. If they end up being insolvent do you guys think BTC price will increase (due to realized less supply of coins) or go down due to bad media coverage plus people trying to recoup some of their losses?

http://www.reddit.com/r/Bitcoin/comments/26apno/bitstamp_will_not_process_withdrawal_unless_you/

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. The purpose of trading on Bitstamp? Please describe in as much detail as possible how you intend to use your trading account. 3. What is the origin of the deposited Bitcoins? If mining, please specify your hardware specifications and submit a receipt or an invoice for your mining equipment. 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 intend 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)?

We kindly ask you to submit your answers and documents in a reply to this ticket.

OK fine, here are the details and my passport (already verified with driver's license and had swift code already entered).

They required that I prove where the coins came from that I sold. I provided the receipt from the exchange. Here is what they came back with.

Thank you for your reply.

Please note that the provided information is for only 5 BTC while you have deposited to and sold on Bitstamp more than xxx bitcoins.

We kindly ask you to send us a signed message of your personal, most used wallet so we can establish the veracity of your statements.

some people may bring about their recent "proof of solvency" of Bitstamp by firestartr.co (whoever the hell that is). It is just a statement though, no blockchain proof. And the PDF is even broken on my PC

https://www.bitstamp.net/s/documents/Firestartr_DD_Letter_for_Bitstamp.pdf

If they are insolvent, the price would go down first (as we've seen with Gox) and then would go back up after. I will say that it would hurt the morale more than it already has, though, in that people are starting to lose trust already.

[harlenadler]

Bitstamp leads the western exchanges, so if any news like that broke, price would definitely go down imo. Dont Bitpay and Coinbase use Bitstamp sometimes? Some merchants too possibly. And I think Bitstamp inherited the "face of bitcoin" role from Gox, so theres that too. But after the darkest day comes the light, LOL.

[ranlo]

Bitstamp leads the western exchanges, so if any news like that broke, price would definitely go down imo. Dont Bitpay and Coinbase use Bitstamp sometimes? Some merchants too possibly. And I think Bitstamp inherited the "face of bitcoin" role from Gox, so theres that too. But after the darkest day comes the light, LOL.

Yeah, Bitpay and Coinbase both use Bitstamp as one of their exchanges, so it would affect both (presumably) as a result. The price would likely bounce back after a couple months, though, so it could be good for people wanting to buy in cheap.

[Ron~Popeil]

Wow that is worse than a paypal freeze. One of the many reasons I will never do business with bit stamp.

[lyth0s]

Yeah coinbase is hypotheized to resell/buy off bitstamp and I believe Bitpay uses bitstamp to convert the BTC to fiat for their customers. With that being said they would need to find new exchanges/marketplaces (maybe even create their own for double profit?) in order to continue business as usual.

I don't how how many more insolvent bitcoin exchanges the public will take tbh. I think another big exchange like Bitstamp going down could put bitcoin in a major set back for a long period of time.

[atp1916]

This type of account verification is nothing new.  It's been in place since September 2013.

That being said, Bitstamp is formally incorporated in the UK, and given the UK's closeness to the US in the context of law enforcement / anti-terrorism is it any wonder that the UK government is (probably) putting pressure on Bitstamp to do a better job at KYC enforcement?  

[Divinespark]

BitstAmp also has lots of European customers from diff nations
Makes Kyc onerous and complex at scale

[ranlo]

This type of account verification is nothing new.  It's been in place since September 2013.

That being said, Bitstamp is formally incorporated in the UK, and given the UK's closeness to the US in the context of law enforcement / anti-terrorism is it any wonder that the UK government is (probably) putting pressure on Bitstamp to do a better job at KYC enforcement?   

Here in the US I've never heard of anyone having to go through and validate every single dollar and where it came from. If you came to me today and asked me to go through my current bank balance (despite how small it is), I still couldn't do that because you get bits and pieces from here and there. It's ridiculous to expect people to keep up with every cent they get, where it came from, when it was spent and what it was spent on.

[lyth0s]

This type of account verification is nothing new.  It's been in place since September 2013.

That being said, Bitstamp is formally incorporated in the UK, and given the UK's closeness to the US in the context of law enforcement / anti-terrorism is it any wonder that the UK government is (probably) putting pressure on Bitstamp to do a better job at KYC enforcement?  

Accounting for where all your coins came from or having to take a photo with your face + your bank statement + your Passport in hand is excessive IMO. I would never go through all that trouble for any service within the US. Are you sure that account verification is that strict in the UK?

[Skele]

This type of account verification is nothing new.  It's been in place since September 2013.

That being said, Bitstamp is formally incorporated in the UK, and given the UK's closeness to the US in the context of law enforcement / anti-terrorism is it any wonder that the UK government is (probably) putting pressure on Bitstamp to do a better job at KYC enforcement?  

Accounting for where all your coins came from or having to take a photo with your face + your bank statement + your Passport in hand is excessive IMO. I would never go through all that trouble for any service within the US. Are you sure that account verification is that strict in the UK?

It sounds just like a anti money laundering rules, why would they be insolvent? Due to a hack again? Bitstamp just takes some slice from the fees, they are not giving any kind of interest

[gentlemand]

I don't think they're insolvent. I do think their practices are totally unacceptable. Once regulated US exchanges open up and Kraken gets some proper momentum they'll be left in the dust where they belong.

[Fippy]

I mostly lurk, rarely post, but as someone who has been involved in the KYC compliance changes for one of the worlds largest financial institutions, I'd just like to say this:

This is quite literally textbook FinCEN foundation, and I would actually take this to be a good sign. It means that Stamp is taking the necessary steps (including a fair bit of 'catch-up') to be in compliance with US money laundering regulations that would place it on the same level of credibility as an international bank. Personally, while it might be a bit of a chore at the outset, I consider this a very good sign long-term.

[BCwinning]

it's none of their business where the coins came from. idgaf if it is for laundering purposes or not.
imnsho its a good place to not do business with if they want to be that anal down to the micro bit.

[Bagatell]

I mostly lurk, rarely post, but as someone who has been involved in the KYC compliance changes for one of the worlds largest financial institutions, I'd just like to say this:

This is quite literally textbook FinCEN foundation, and I would actually take this to be a good sign. It means that Stamp is taking the necessary steps (including a fair bit of 'catch-up') to be in compliance with US money laundering regulations that would place it on the same level of credibility as an international bank. Personally, while it might be a bit of a chore at the outset, I consider this a very good sign long-term.

Great first post.

[DogeBalla]

I mostly lurk, rarely post, but as someone who has been involved in the KYC compliance changes for one of the worlds largest financial institutions, I'd just like to say this:

This is quite literally textbook FinCEN foundation, and I would actually take this to be a good sign. It means that Stamp is taking the necessary steps (including a fair bit of 'catch-up') to be in compliance with US money laundering regulations that would place it on the same level of credibility as an international bank. Personally, while it might be a bit of a chore at the outset, I consider this a very good sign long-term.

Great first post.

+1

[Fippy]

it's none of their business where the coins came from. idgaf if it is for laundering purposes or not.
imnsho its a good place to not do business with if they want to be that anal down to the micro bit.

Most of the questions fall into the 'cover your ass' category of information they need to have available to provide in the event of a regulatory inquiry. Almost any BS answer will likely be acceptable for them, as they simply need something to 'fill in the blank' that looks somewhere within shouting distance of accurate. Having a massive blank there is a huge red flag that is a liability for them, having literally anything there allows them to meet their regulatory obligations. It's the job of the regulatory agencies involved in any inquiry to play connect the dots, should there ever be reason to do so. Bitstamp's only obligation is to provide dots.

While you might consider it anal, the plain and simple fact is that should Bitcoin ever gain true mainstream traction, you will see more of this simply due to the fact that no financial system of any sort is going to go mainstream without meeting some level of regulatory standards. All of this is information that is the same type of information that is 'free-floating' in the mainstream financial system, you simply aren't regularly asked questions like this because the banks already have a system in place that creates the obligatory paper trail and have for years. It's so interwoven into the fabric of international banking we don't even notice it anymore. Bitcoin will need to step up to this level to become truly 'mainstream'.

[worldlybedouin]

In general I have no problem with KYC policies and complying with them.  I think Bitstamp has just gone way overboard though.  There's such a thing as CYA and then there's overkill which is what I think they are doing.  I've completed KYC with banks and BTC exchanges and none required this much hoop jumping.  I'm all for helping to legitimize BTC, but when its actually more cumbersome than what other exchanges require it's just too easy for me to leave Bitstamp....


sooo...Adios!  I wish Bitstamp all the best luck in the world.  We need a really solid and reputable BTC exchange, but when you dial the KYC down just a little bit, give me a call...I'll be back.

Cheers!

[ranlo]

In general I have no problem with KYC policies and complying with them.  I think Bitstamp has just gone way overboard though.  There's such a thing as CYA and then there's overkill which is what I think they are doing.  I've completed KYC with banks and BTC exchanges and none required this much hoop jumping.  I'm all for helping to legitimize BTC, but when its actually more cumbersome than what other exchanges require it's just too easy for me to leave Bitstamp....


sooo...Adios!  I wish Bitstamp all the best luck in the world.  We need a really solid and reputable BTC exchange, but when you dial the KYC down just a little bit, give me a call...I'll be back.

Cheers!

This is how I feel. I don't have problems with submitting information, ID, etc. You do the same when you want a loan. My problem is having to sit around and think about where every single coin came from. That's absurd. Even when getting a mortgage loan they don't require you to do this; they simply want to know where your income comes from. They don't have you go through your bank accounts and look at every single deposit (like cash) and ask where it came from.

[crocko]

Found this today, seems although Bitstamp is making it EXTREMELY difficulty to withdraw both BTC and Fiat currency. Seems like a Mt. Gox 2.0 problem. If they end up being insolvent do you guys think BTC price will increase (due to realized less supply of coins) or go down due to bad media coverage plus people trying to recoup some of their losses?

http://www.reddit.com/r/Bitcoin/comments/26apno/bitstamp_will_not_process_withdrawal_unless_you/

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. The purpose of trading on Bitstamp? Please describe in as much detail as possible how you intend to use your trading account. 3. What is the origin of the deposited Bitcoins? If mining, please specify your hardware specifications and submit a receipt or an invoice for your mining equipment. 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 intend 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)?

We kindly ask you to submit your answers and documents in a reply to this ticket.

OK fine, here are the details and my passport (already verified with driver's license and had swift code already entered).

They required that I prove where the coins came from that I sold. I provided the receipt from the exchange. Here is what they came back with.

Thank you for your reply.

Please note that the provided information is for only 5 BTC while you have deposited to and sold on Bitstamp more than xxx bitcoins.

We kindly ask you to send us a signed message of your personal, most used wallet so we can establish the veracity of your statements.

some people may bring about their recent "proof of solvency" of Bitstamp by firestartr.co (whoever the hell that is). It is just a statement though, no blockchain proof. And the PDF is even broken on my PC

https://www.bitstamp.net/s/documents/Firestartr_DD_Letter_for_Bitstamp.pdf

Bitstamp is OK, stop spreading FUD !