Bitstamp, one of the oldest bitcoin exchange, has taken a somewhat unique step in offering ordinary investors equity with the aim of raising $1.2 million in return for 2% equity.
Vasja Zupan, Chief Operating Officer at Bitstamp, told CCN:
As Bitstamp has invested heavily to be fully licensed we are now focused on growth and product development. We see opportunity to get to the next level by relatively small investment. This investment need is probably too small for an established VC fund. Therefore we decided to invite qualifying investors to take a stake in Bitstamp on the BnkToTheFuture.com investment platform. We do not see this as a Crowdsale as it is directed to qualified investors only.
In total, the company currently has 138,345 shares, with 45,000 owned by each of the founders Nejc Kodric and Damijan Merlak, 30,000 owned by Pantera Venture Fund in return for their $10 million seed investment in 2014 and 16,362 owned by Daniel Morehead, CEO of Pantera Capital with a small number of further shares owned by a few other individuals. Online investors would, therefore, receive around 2,766.9 in exchange for almost $1.2 million, valuing the company at $60 million.
The UK incorporated company boasts they are “the first and only digital asset exchange to be fully licensed in all 28 EU member states,” and plans to add “[f]iat currencies such as GBP, JPY, AUD and CAD, as well as other cryptocurrencies (starting with Ethereum),” as well as margins, according to their investors page.
Bitstamp further states they charge a commission or flat fee for every transaction, with exact revenue and profit figures unknown at this stage as Zupan told CCN they “can not publicly share any financial information.” Nejc Kodric, Bitstamp’s CEO, stated in a press release:
Nejc Kodric, Bitstamp’s CEO, stated in a press release:
“As the first and only Bitcoin exchange to be fully licensed in all 28 EU member states, we are aware of the key role we play in regulating this sector of the financial industry. Digital assets aren’t on their way – they’re very much part of the here and now, and it has been a huge responsibility and privilege to be involved in setting up the regulatory framework for a better, transparent and more responsible financial industry.”
Bitstamp, which currently employs 38 individuals, became a favorite of the digital currency space as awareness rose of MT Gox’s amateurism in 2013. Along with Bitfinex, and now lesser known exchanges, they filled the market’s demand for competition, becoming at one point one of the largest exchange. That made them a target, however, leading to a hack of $5 Million during summer last year.
The exchange had already fallen behind by that stage, with Coinbase aggressively innovating in its provisions of instant purchases and deposits, while unregulated Chinese exchanges entered the market to provide futures and margins, with some as high as leverages of 100 points.
However, unlike many in this space, Bitstamp fully covered the $5 million loss and appears to be compliant. Their prospectus states they provide “monthly financial reports to the Luxemburg Financial Authority” and undertake yearly, “external and independent” audits of “IT security checks and data protection processes,” as well as “anti-money laundering and anti-terrorist financing” checks.
The company, therefore, has retained trust, serving 591,000 customers, with trading volumes of 36 million btc and $3 billion bank transfers since launch. With Circle’s recent closure of bitcoin services, they may even become a serious competitor to Coinbase, but whether the company can keep up with the pace of innovation, both in ease of purchase as well as leverages, remains to be seen.
Image from Shutterstock.