Bitstamp boss on dogecoin: we won’t list crypto that crashes on billionaire tweet

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Bitstamp will not engage with smaller cryptocurrencies that are gaining in popularity such as dogecoin, going against a trend set by other leading exchanges keen to profit from the craze.

So-called altcoins have gradually gained traction within the crypto community during the 2021 bull run, as traders seek major bargains by investing in coins that could become the next bitcoin or ether.

Dogecoin, a cryptocurrency that started out as a joke in 2015, hit $ 0.74 in May, fueled by high-profile tweets and coin debuts on major exchanges including Kraken, Gemini, and Coinbase. He was publicly backed by Tesla boss Elon Musk, entrepreneur Mark Cuban and singer Dionne Warwick.

READ Small investors are coming back to cryptos

Bitstamp chief executive Julian Sawyer said all tokens listed on the world’s oldest crypto exchange must meet strict requirements and pass an internal analysis that includes examining the origins of the coins, governance, security and other aspects.

Basically you have to look at the basics, which is why we only want to list assets that have some substance behind them, some liquidity, Sawyer said in an interview with Financial News.

The problem is, if you go to some who are turned on by a billionaire tweet, or crash down on a billionaire tweet, we don’t think that’s fair. Were there to protect your money in your investments.

The price of Dogecoins fell back to levels of around $ 0.30 this month, as the hype around the coin and cryptocurrencies in general faded. The sector has been marked by a sea of ​​red in recent months, with digital assets registering their sixth straight week of releases on August 16, the longest streak since January 2018, according to data from CoinShares.

Where other exchanges such as Binance list hundreds of crypto tokens, Bitstamp supports around 30 coins on its platform.

It’s not a race for quantity, it’s a race for quality, said Sawyer. We are currently launching about four to six assets per month, which is very comfortable out of the 7,500 that exist, and it is a lot more than two years ago.

Cryptocurrency brokers and exchanges have come under intense global regulatory scrutiny this year, as digital asset adoption skyrockets. Recent attention has largely focused on Binance on its offering of regulated products such as derivatives and exchange tokens, with warnings issued against various operations of the company in the UK, Japan, Germany, Italy, Hong Kong and elsewhere.

READBinance crackdown highlights crypto regulatory conundrum

The UK’s Financial Conduct Authority said earlier this year that it was concerned that most consumers did not fully understand the risks of investing in cryptocurrencies. A survey in January found that only 10% of Britons who had heard of cryptocurrencies had seen regulators’ crypto risk warnings on its website, although some 2.3 million people purchased tokens from the time.

We want to make sure customers understand what these tokens are, instead of just buying them because they’ve been listed on the stock exchange, Sawyer added.

There are probably a lot of consumers who have gone to other exchanges and bought tokens when they don’t understand the use case, the opportunities and the risks. If you have a billionaire tweeting and suddenly the core value of it [token] has changed completely, it is not a good place to place your investments.

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To contact the author of this story with comments or news, email Emily Nicolle

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