Bitstamp CEO Rejects Dogecoin, Won’t List Crypto That Crashes on a Tweet

Divya  |  Aug 18, 2021

In an interview with media outlet Financial News, Bitstamp CEO Julian Sawyer said he won’t allow smaller cryptocurrencies on his platform that react to social media activity. Sawyer was specifically targeting his comment at meme currency Dogecoin, which has been talked up by Tesla CEO Elon Musk on Twitter in the past.

Bitstamp CEO Won’t List Smaller Cryptos Like Dogecoin

Speaking on the factors that motivate Bitstamp to list a digital asset, Sawyer stated:

“Fundamentally you have to look at the basics, which is why we only want to list those assets that have some substance behind them, some liquidity,” 

He further asserted that the Luxembourg-based exchange would always prefer quality assets. He describes this as a “race to high quality” rather than a “race to amount”. In this context, Sawyer also highlighted that Bitstamp only approves 4 to 6 crypto assets each month, despite the 7,500 options currently in the market.

Regarding Dogecoin, Sawyer felt that the biggest issue is the currency’s correlation with Elon Musk’s Twitter posts. While criticizing this aspect and underscoring the importance of consumer protection, he stated:

“The issue is that if you go to some that are hyped up by a billionaire’s tweet, or crashes on a billionaire’s tweet, we don’t think that’s right. We’re here to protect your money in your investments.”

Notably, DOGE has had a difficult time posting steady gains ever since Musk’s SNL appearance. The meme coin crashed more than 50% from its all-time high of $0.74 in May and has since struggled to reclaim its losses. 

Nevertheless, it has seen strong demand from cryptocurrency exchanges that wanted to capitalize on its hype. In July, stock and crypto trading app Robinhood revealed in its IPO filing that Dogecoin accounted for 34% of its revenue and listed it as a risk factor for prospective investors.

Bitstamp’s Increasing Emphasis on Compliance

In response to the heightening regulatory pressure, various exchange platforms are tweaking their operations to meet the most basic anti-money laundering (AML) and know your customer (KYC) requirements. But Bitstamp is going a step further and filtering out assets that are embroiled in controversies. 

Last year, the exchange suspended XRP trading due to a lawsuit involving its issuer Ripple and the US Securities and Exchange Commission. More recently, it brought former federal prosecutor Thomas Hook on board as its new chief compliance officer to take a lead in the “evolving regulatory landscape.”

 

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