The Bitstamp cryptocurrency exchange is looking to raise funds to finance its ventures into new markets, according to a Bloomberg report.
A spokesperson said it plans to launch derivatives trading in Europe next year and open its services in more Asian countries. The funds will also be used to increase its operations in the UK after gaining regulatory approval in the market.
“Our current and exclusive priority is to raise money through strategic investors to accelerate Bitstamp’s growth by providing new products and services to retail and institutional crypto customers,” said Jean-Baptiste Graftieaux, global chief executive officer of the platform.
The Luxembourg-based exchange began its fundraising process in late June. Galaxy Digital Holdings, a blockchain investment company, is acting as the adviser, a spokesperson told Bloomberg. Previously, Galaxy advised Pantera to sell its stake in Bitstamp to Ripple.
Graftieaux said: “Bitstamp is not for sale, and we are not actively looking to sell the company.”
UK regulator approves Bitstamp
Bitstamp’s plans to raise new funds came off the back of gaining approved from the UK’s Financial Conduct Authority. It saw regulatory approval on 13 June, giving it access to the UK market.
“With mainstream adoption continuing to be our goal, Bitstamp is establishing itself as a driving force in advocating that increased regulation is key to this journey,” said Graftieaux.
Crypto firms and exchanges need to pass anti-money laundering checks to be approved by the FCA.
The FCA started vetting crypto firms in January 2020 and has since received over 300 applications. Only 43 companies have passed the money laundering checks and been registered by the regulator.
Bitstamp is now looking to expand its operations in the UK with its new fundraising round.
The exchange was able to gain dominance in the US markets after it acquired a BitLicense, a crypto business license granting access to serve New York customers.
Bitstamp USA gained market share in the country during 2023, while giants in the industry like Binance US and Coinbase lost out, according to Kaiko.
How popular is Bitstamp?
Bitstamp is one of the oldest crypto exchanges, having been founded in 2011. It was among the biggest players, an alternative to the once-dominant Mt. Gox.
But in 2018, the exchange was acquired by the European investment company NXMH, which is owned by the South Korean firm NXC.
As of 8 August 2023, Bitstamp is the seventh-largest exchange, according to CoinMarketCap’s rating that takes into consideration traffic, liquidity and trading volumes. The exchange has a 24-hour trading volume of $129million.
Smaller players move towards derivatives
Bitstamp is among other crypto exchanges looking to expand their offerings of derivatives. More crypto platforms are taking advantage of the space, which was once dominated by the defunct FTX exchange. Coinbase and Gemini have started their own offshore derivatives exchange this year.
Launched in May, the new derivatives exchange from Coinbase allowed for trading perpetual futures in Bermuda. Only institutional investors that are not based in the US can utilise the platform.
The move came amid tensions between Coinbase and US regulators, with the SEC later launching a lawsuit against the crypto exchange.
Similarly, Gemini launched its derivatives exchange for non-US users with plans to serve over 30 different markets. Its first product was announced to be a BTC perpetuals contract.
Bitstamp will launch its derivatives trading to European customers in 2024 as it looks to expand its crypto products and services in the continent.