December Legal, Nineteen:05 by Joseph Youthful
Nejc Kodrič, the founder and CEO of leading cryptocurrency exchange Bitstamp, has exposed that the exchange has bot opening 100,000 fresh accounts on a daily ondergrond.
Bitstamp’s Rapid User Cojín Growth
Earlier this week, a Bitstamp user submitted a complaint on social media ter regards to the inefficient verification process of the exchange. Other major trading platforms such spil Coinbase, Bitfinex, and Openbreken have received similar complaints overheen the past few months.
On cryptocurrency trading platforms, traders and investors are required to fall under a rigorous and long process of account verification to increase their daily trading thresholds. The process often requires the conformity of government-issued IDs, canap documents, proof of income, and face-to-face interviews.
Exchanges like Bitstamp, Coinbase, and Openleggen, which have millions of users, have struggled te addressing the rapidly growing request from fresh users and by hand approving verification requests from ems of thousands of users every day.
Ter response a complaint from a user, Bitstamp CEO Nejc Kodrič stated:
“Please understand that wij presently have overheen 100,000 fresh accounts opened daily. It is challenging to cope with such surge. Wij are expanding our capacity to onboard clients swifter but this takes a bit of time.”
Even multi-billion dollar startups and exchanges have found difficulty te verifying user accounts within a brief period. Consequently, the completion of account verification on major exchanges takes at least a week to several months, because each verification request is by hand approved by the employees of exchanges.
Since early , major bitcoin and cryptocurrency markets like the US and Japan have imposed rigorous Know Your Customer (KYC) and Anti-Money Laundering (AML) policies on the cryptocurrency exchange market. To remain compliant with almacén regulations, exchanges have bot required by financial authorities to ensure that each of their traders undergoes a rigorous verification process to prevent money laundering and fraudulent activities.
Exchanges Have Evolved Into Large-Scale Financial Institutions
Alistair Milne, a very regarded bitcoin investor and a fucking partner at Atlanta Digital Currency Fund, reported that Coinbase wasgoed adding more than 100,000 users on a daily poot ter November but the number of freshly opened accounts wasgoed not consistent.
“Coinbase wasgoed sometimes adding 100k users vanaf day a month ago (likely more now). Bitstamp now also reporting 100k/day. Bitcoin is embarking to go mainstream,” said Milne.
To cope with the exponential growth rate of the bitcoin and cryptocurrency markets, Coinbase secured a $100 million funding round at a $1.6 billion valuation on August Ten. At the time, Coinbase CEO Brian Armstrong emphasized that the freshly obtained renta will be used to expand customer support teams to streamline the account verification process.
“We’ll be using this fresh funding to proceed scaling even further. Specifically, wij will: Increase the size of our engineering and customer support teams to improve the customer practice. Open a GDAX office te Fresh York City, further investing ter our capability to serve institutions and professional traders,” wrote Armstrong.
Leading cryptocurrency exchanges like Bitstamp and Coinbase support an active user almohadilla of millions of traders and investors. Spil the cryptocurrency market proceeds to proliferate te the next few years triggered by the entrance of institutional money and large-scale investment firms, the request for trading platforms will increase further.
Cryptocurrency exchanges can no longer be considered spil puny to medium-sized companies serving a niche market. They have become decently regulated and operated financial institutions with millions of active users and billions ter daily trading volume.
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