Bitstamp USA CEO explains 'greatest impact' of potential spot bitcoin ETFs in the U.S.

what a year it has been in crypto we saw more enforcement action from Regulators here in the US against crypto companies we saw regulatory advancements around the globe a high-profile crypto trial and now we're capping off 2023 with major cryptocurrencies hitting fresh highs for the year what do you think is driving those prices right now do you think ETF optimism is part of the equation uh yes I do and um what a year it's been it's been uh just never a dull moment I I was told five years ago when I came to the crypto industry full-time that it was to expect um quite an experience than it has been to answer your question absolutely there's a few triggers that I think are underway here and the probably the most important one is this ETF optimism and um you know it's a it's an access point for a whole new segment of of investors and of participants and it's a you know a an Avenue that works really really well and is well proven um amongst lots and lots of people who who participate in traditional Financial Services markets so from a crypto perspective it's just all positive and um we think the more you know the more participants the more healthy the markets and the more healthy the markets the more um available this technology is to more people do you anticipate that ether and Bitcoin will continue to climb in 2024 and if so what are some of the catalysts that will help make that yeah great question and I I try not to speculate on prices but I'm pretty excited about 2024 for a number of reasons so um you know the first is um in continuing and even increasing institutional adoption so so we are seeing at bitstamp um a market increase in 2023 even in spite of all of the the challenges and the headwinds that the marketplace has faced are the FTX um you know uh regul regulatory uncertainty um you know banking challenges you know in spite of all of these things institutions even if they're not trading a lot or investing a lot they have been onboarding and getting ready I think for uh increased adoption and hopefully some improved regulatory Clarity particularly in this part of of the world um in Europe it's quite a different picture today that there is more regulatory Clarity and in Europe we are seeing a lot more participation across the board uh than we're seeing in in the US and and Asia also is is quite positive so I think that in 2024 there's going to be quite a few um factors that coales and and and improve the markets and we'll talk more about regulation in a little bit but are you by any chance paying attention to the Bitcoin having that's coming up next year usually we see a rally leading up to having event uh for example back in 2020 when the last having event took place Bitcoin climbed 19% compared to the same day the year before so is that contributing to bitcoin's Rally what do you think it is and it will but I confess I don't really know why exactly right so the the uh his historically to your point the The Happening just definitely creates interest creates enthusiasm creates adoption and and then therefore you know inflates the the price or increases the price helps to increase the price um but you know I don't know what the direct correlation is is or if it's just a coincidence kind of or coincidental factors that are coming together but I'm happy it's happening um and it is a really important um milestone for the ecosystem for the Bitcoin ecosystem so we're I'm looking forward to that I think that's a contributing factor now many industry experts believe that a crypto ETF will be available in the US early next year last time we spoke you mentioned that you were optimistic it will happen you noted that uh crypto ETF a spot Bitcoin ETF was already available in markets like Canada in regions like Europe and so it would be great if it was available here too do you expect it to happen early next year and if so will it impact your business at all I do expect it the the the rumors that I've heard are are January even um and um I don't think there's uh a way to Forstall it much longer um so I do think it's it's it's going to happen and the biggest impact I think is when you're talking about companies like black rock you know some of the the greatest companies in the world um you know they don't you know they're not doing this out of ideology they're doing it because there's demand for it so when they come out with a Bitcoin product it's a giant stamp of approval it's just going to give a lot of people confidence to participate now you are in fact the CEO of bitstamp USA right now but before that you worked for the crypto exchange Kraken as its Chief commercial officer Kraken has recently been in the news once again the SEC recently sued Kraken for allegedly operating as a Securities Exchange without registering with the agency first it also alleges that Kraken commingles its funds with customer funds Kraken said it disagrees with the complaint against them but what do you think about that de velopment and what do it signal to the crypto industry all this enforcement action we're seeing yeah it's it's difficult the SEC has a tough job right and um I do believe that they're trying to you know manage a very comple complex and fast moving industry um however it does um puzzle me a bit how they're going about it so it does seem to be enforcement Le versus more dialogue and and Ru making but um but like like I said I don't walk in their shoes they've got a tough job uh as it relates to Kraken you know um you you know they I believe the fundamental challenge between the SEC and Kraken or the SEC and coinbase for that matter is about the nature of cryptocurrencies um however with Kraken there's some other questions that were raised in the suit and in the action about comingling of funds and other things I certainly don't have any information related to that but um you know I I um I know that Kraken coin base fit stamp these are these are positive players in the industry that are trying to do the right thing now other agencies are going after crypto companies we have seen last month binance and its CEO pleaded guilty to federal charges and agreed to pay more than $4 billion dollar to resolve the doj's investigation against the firm coinbase CEO Brian Armstrong argues that the binance Fallout represents an opportunity for a new chapter for the crypto industry do you agree I do I do I I I um I think that's a really important action for a number of reasons you know firstly um you know there were so many questions surrounding and swirling around binance and CZ for a long long time and you know you worry as a industry participant or perhaps as a customer about what's next and um and what I'm uh very pleased about is that the doj took an important action here to level the playing field and basically send the message that that you know there's certain types of things that are just not acceptable in any context not just crypto or or other financial services but that action was taken and and and correction is happening without an implosion you know what I wanted to avoid was another FTX type scenario where where bad practices you know promulgate and proliferate within ay company and and then ultimately you know there's a giant failure and that would that affects the whole industry we're still you know we're still dealing with the FTX Fallout and you know that that's hampen hampering our ability to make laws in this country it's hampering our ability to um you know create trust and credibility which is really the the the reason we're here so so I think it's um you know a difficult situation but probably the best possible outcome um given the risks associated with that company do you anticipate we'll see more enforcement action like this in 2024 or do you think it will be a little more subdued as we hopefully get more regulatory Clarity here in the US yeah I I don't know um however I'm I'm cautiously optimistic that uh lawmakers in Washington DC really uh are taking the issue seriously um obviously as you know election cycle coming it's going to be very very difficult for laws to actually occur her but I did spend some time in DC recently um meet meeting with some Congressional staffs and I was very impressed with how um first of all how knowledgeable they were about the topic more than I expected and also how engaged they were on the topic so they are playing the long game I would say um so I'm I'm not expecting legislation uh you know in the next one to two years but I do believe it's coming um now in the meantime to your question I would not uh I would not um I I do think there'll be additional enforcement action I think the SEC is going to uh stay very active um again I think they're they they think they're doing the right thing um but again they're approaches a little little puzzling from my standpoint now we have seen some regulatory advancements here in the US in fact lawmakers Advance the stable coin bill and the fit for the 21st century act which establishes a crypto framework that happened over the summer do you think that was enough what would you like to see from lawmakers in 2024 specifically well the state stable coin stable coin seems like the most actionable piece of this from a from a legislative standpoint um you know there's there seems to be broad agreement about what's important as it relates to stable coins so I'm hopeful that if there's anything that they can get done it would be a stable coin bill or or a code of law or a framework around stable coins in the near term in 2024 now we need more than that we need a full comprehensive framework of laws that that defines a role of agencies of regulatory agencies and you know provides the right consumer protections that that the world needs uh in in Europe we're seeing this play out there's the Micah framework which has been adopted and will be coming into Force next year um and it is enabling um more rational um discussion Innovation um participation and from a bitstamp perspective a lot more um you know participation and on boarding particularly from institutions they've been waiting and now they're getting involved which which is positive now bitstamp is discontinuing operations in Canada starting January 8th 2024 so I'm wondering what was behind that decision yeah it's uh it was a tough decision and um the Canadian regulator has been uh really really uh great to work with um and they have a very very serious um and well structured regime around crypto uh which which we we aim to participate in but for us at this time it was a prioritization issue basically there's an awful lot of work a awful lot of product work that's necessary to be 100% in compliance with all of their um requirements and particularly their reporting requirements and um we don't want to we don't want to do it prematurely until we know we can prioritize that work and get it all done um and uh we just had to make some tough business decisions there but we will be back we think it's a very important market and it's always been a great Market to us speaking of business decisions over the summer we learned that bit stamp halted ether staking in the US amid the regulatory environment you noted that the crypto Crackdown influenced that decision but you also mentioned that bit stamp might reintroduce ether staking in the US in the future so I'm wondering now that we're entering 2024 maybe we'll get more regulatory Clarity do you expect that could potentially happen in 2024 uh it's hard to say the timing of it but we we do feel strongly that we have a a strong offering there and an offering that you know makes it very clear where the line starts and stops between our staking product which is a function of the protocol the eth protocol versus an investment contract however we did halt it because why it was named in an SEC action as a potential issue for the for the SEC or security is offering and you know from a bitstamp perspective and and you you know us well we we are very very compliance forward and quite conservative when it comes to regulatory um items issues um or or objectives so out of an abundance of caution we just said all right look if the SEC at least has questions about it we're just going to to pause it for now um and and as more clarity you know becomes available uh then if we can we'll we'll roll it back out we do think it's a great offering but um we're having the same issue with tokens so the SEC has has identified certain tokens in their actions we're not exactly sure what the common denominator is across those tokens they've identified but that's beside the point if they've named it we have respect for the SEC we listen to the SEC we're just going to pause those tokens which we've done now I came across an axios article that said that bitstamp is looking to raise $50 million in its post FTX expansion is that the case and if so where would that money be going yeah yeah we're excited about um some additional Strategic investment in the business and the objective is quite simple we want to go faster so you know given everything that's going on in the market FTX and binance and all of this stuff we think it's a good moment for bitstamp so bitstamp was the first to ever have a license we you know we're the only crypto company that says we you know we we have 7 years of clean audit opinions from a big four accounting firm you know we have a really really professional and well-governed Company so we want to use this this funding to go faster from a product perspective and to elevate our voice uh a bit at this moment when when I think obviously I'm biased but I think more people and more institu institutions need to be aware of us

Channel: CNBC Television

Views: 19,185

Keywords: crypto world, cryptocurrency, bitcoin, digital currency, bitstamp, bobby zagotta

Id: VmaCqM20NBU

Length: 14min 53sec (893 seconds)

Published: Fri Dec 29 2023