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Bitstamp CEO on 30% staff cut, the crypto meltdown, and why ‘we’re the good guys’

Bitstamp CEO on 30% staff cut, the crypto meltdown, and why ‘we’re the good guys’
Bitstamp CEO Jean-Baptiste “JB” Graftieaux remains bullish despite the crypto winter.

When Bitstamp CEO Jean-Baptiste “JB” Graftieaux was asked about the cascading threats to the crypto industry, he looked into the webcam and smiled.

“We are the good guys,” the boss of the Luxembourg-based crypto exchange told DL News, adding that it having registered with authorities in France and Spain after the collapse of FTX suggested it was doing something right.

Graftieaux – who took the reins in May after predecessor Julian Sawyer suddenly left following a disagreement – distanced Bitstamp from collapsed crypto companies like Celsius, Voyager, Three Arrow Capital, and particularly FTX.

He boasted about Bitstamp’s commitment to regulation; about how the firm has been audited by Big Four auditor EY since 2016; that it has 51 licences around the world; and that the exchange’s leadership has oodles of experience. His message is clear: the world’s fifth biggest exchange by trading volume, traffic and liquidity is here to stay.

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“My chief operating officer today is 56 years old, the chief operating officer of FTX was 28 – it’s not the same experience,” Graftieaux said.

Just like crypto companies including Coinbase, Polygon and Protocol Labs, Bitstamp is hunkering down amid mounting regulation and wobbly markets. It recently reduced its headcount by 30%, from around 650 in September to 450 in February.

“It’s not a round of layoffs,” Graftieaux said. A number of consultants working on licence, strategy, compliance and security finished their projects.

“All of these people completed their engagements [at] the end of last year,” Graftieaux said.

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The FTX collapse has also provided regulators with ample reason to renew their efforts to reel in the crypto industry.

The US Securities and Exchange Commission has slammed the industry with a string of law enforcement actions, including a $30 million fine against exchange Kraken for failing to register the offer and sale of its staking-as-a-service programme.

The lawsuit troubled Bitstamp: Its US chief Bobby Zagotta has described the company’s own Earn product as “staking, pure and simple.”

“Our first reaction was to look at our product, compare it with Kraken, deconstruct the SEC accusations and see if we were on the safe side,” Graftieaux said.

Graftieaux noted that while the SEC suit said Kraken’s staking programme mixed investors’ assets “together with their own proprietary tokens,” the Earn product keeps investors and the company’s assets “completely segregated.”

He added that Bitstamp has not heard “from the SEC or any regulators in the US [that] our product would be non-compliant.” Consequently, the company is keeping the Earn product for now.

“We are not removing or withdrawing our staking products from the platform in the US for the time being,” he said.

Others have pointed out that one of the mistakes Kraken did was to fail to register its staking service with the SEC in the first place.

Bitstamp declined to comment about whether the firm had registered its Earn product with the agency.

Graftieaux said he welcomed further regulatory crackdowns on the industry, saying it would provide much-needed clarity.

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The SEC’s Kraken crackdown was the latest in a long string of enforcement actions, which had only ramped up after FTX crashed in November.

Bitstamp was quick to distance itself, halting trade with the rival exchange’s native token FTT just days after the company filed for bankruptcy.

Graftieaux maintained that Bitstamp has no exposure to the collapsed company, contrary to several firms that have been caught in the fallout of the crash.

The recent collapse of Silvergate kicked off a week that saw crypto-friendly banks Signature and Silicon Valley Bank close. Market watchers anticipate that these banks shuttering will exacerbate the regulatory crypto crackdown.

“We have been fortunate,” Graftieaux said. “We have no material exposure to Silvergate Bank. We had no connection to Silicon Valley Bank, and all Signature Bank customers are now customers of Signature Bridge Bank, which has the full backing of the US government.

Graftieaux added: “We continue to build new relationships with banks.”

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The CEO suggested that the turmoil following the collapse of FTX has benefited Bitstamp.

Bitstamp’s trade volume soared 26% between December and February, according to the exchange.

“It has been good for Bitstamp,” Graftieaux said, suggesting that the company’s commitment to compliance has turned it into a trusted haven of sorts.

He said the company’s “financial statements have been audited and with unqualified opinion” by EY. Graftieaux said Bitstamp plans to release its own proof-of-reserves in the second half of 2023.

He added that Bitstamp’s owner, South Korean tech conglomerate NXC, is “very well funded.”

“In case we will need any financial support, we could still turn to our shareholders, which is not the case today because [we] are in a very, very healthy financial situation,” Graftieaux said.

The Bitstamp CEO hinted that it could start to invest in more startups this year – it backed Thalex’s, a trading platform offering stablecoin-settled crypto options and futures, €7.5 million Series A round last year.

“We are looking at different opportunities as we speak,” Graftieaux said. “It’s possible that we make an investment in a few companies. But at the moment it’s probably too early to share any specific information.”