Bitstamp, one of the largest BTC/USD bitcoin exchanges and marketplaces based in Europe, has launched an investment initiative on online investment platform BnkToTheFuture to obtain US$1.2 million in funding at a $60 million valuation.
The BnkToTheFuture investment offering will continue on for the next 50 days, until Bitstamp reaches its minimum investment goal of $600,000. If the Bitstamp team successfully secures the full $1.2 million funding round, it will offer 2% of the company’s equity to the qualified investors on BnkToTheFuture.
In its investment pitch, Bitstamp emphasized its rapid customer growth since early 2011, demonstrating nearly a 160% annual growth in their user base. Nejc Kodric, co-founder and CEO at Bitstamp, also noted that the exchange is handling over $12 billion in volume.
“Our Bitcoin exchange was the first to implement the high security multi-sig wallet, the first to become a nationally licensed bitcoin exchange in all EU member states,” said Kodric. He also stated that the company will focus on security and reliability of the platform going forward.
Focus on Security and Reliability
In January of 2015, Bitstamp was hacked, leading to the theft of around $5 million worth of bitcoin. Based on the current value of bitcoin, the loss of 19,000 bitcoin amounts to $14.25 million.
To prevent further hacking attacks targeted at its hot wallets or online storage, Bitstamp integrated BitGo’s multi-signature wallet technology to secure user funds with a third party service provider. The integration of the BitGo multi-sig technology meant that even if hackers gained access to user funds, without the confirmation of BitGo, funds cannot be released to the recipient.
In a statement, Kodric told its users, “We have also taken this time to implement a number of new security measures and protocols so that customers can resume using Bitstamp with full confidence and trust.”
Since then, the Bitstamp development team has continued to allocate their development capacity and capital to protect the platform with security measures, enhancing overall efficiency of the platform, according to Bitstamp.
Appealing to BnkToTheFuture Investors
The BnkToTheFuture team notes in the Risk and Disclaimer Information section that each investor participating in the funding round have passed the platform’s compliance process.
“This pitch may also be offering shares in the company to sophisticated, professional, accredited and high-net worth investors who register and pass our compliance process,” reads the Risk and Disclaimer Information section.
The Bitstamp bitcoin exchange is compliant with money transmission and KYC regulations in all European Union member states, eliminating some potential conflicts and boundaries between its users and the authorities.
However, some users and investors expressed their concerns with the Bitstamp team’s investment pitch, particularly because of the pitch did not entail any future plans or possible allocation of the $1.2 million funding round.
Considering that leading venture capital firm Pantera Capital already invested $10 million in seed funding in May 2014, some users and traders on Bitstamp felt that it is important to acknowledge the allocation of funds to ensure that both venture capital funds and budget obtained from the BnkToTheFuture are spent responsibly, for the development of the platform.
Do you think accredited investors will complete the $1.2 million funding round of Bitstamp? Let us know in the comments below.
Images courtesy of BitGo, Shutterstock
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Bitstamp Tries the Crowdfunding Route at Million Valuation