- Bitstamp’s announcement and then withdrawal of an inactivity fee has been seen as a huge PR blunder
- The exchange wanted to charge inactive accounts with balances below €200, €10 per month
- Bitstamp scrapped this fee after huge backlash
Bitstamp’s scrapping of a proposed monthly ‘inactivity fee’ has set the seal on a bad…very bad…PR move from the exchange. Exactly who came up with the suggestion of charging customers for not using the platform or how it, presumably, passed several executives will never be known outside of Bitstamp towers, but the venerable exchange, one of the oldest in the crypto space, has done nothing more than perpetuate the growing theory that centralised exchanges are an anathema to the ideals of crypto.
Bitstamp Charges for Using and Not Using the Platform
Bitstamp was founded back in the crypto dark ages of 2011, quickly becoming a trusted platform as Bitcoin made its first tentative steps. However, it has failed to move with the times, especially since the 2016/17 bull run, and now finds itself outside the top 30 exchanges by volume, not just failing to capitalise on its first mover advantage but doing the exact opposite.
With the crypto winter setting in, exchanges are looking at ways in which to curb spending and preserve capital – Coinbase has issued a hiring freeze (and sacked people it had promised jobs to), while Kraken, Gemini and BitMEX have cut staff numbers. So what does Bitstamp do? It introduces a €10 fee, to be levied monthly, to those holding below €200 who don’t use the platform.
The thought process behind such a move would make even Ebenezer Scrooge wince. How can you put a gun to your customers’ heads and say “use our product or we’ll take your money”? In what twisted, backwards world does this make sense? And this at a time when everyone is suffering from the rising cost of living.
But it’s ok, because if you’re being forced to use the platform once a month to avoid the €10 fee, you’re getting some kind of trading discount, right? No, you’re still being charged up to 0.5% per trade, so they’re taking your money whichever way you slice it.
Cue applause.
Exchange Rows Back After Seeing the Light
The reaction to the news was, well, what any rational person would have expected:
Inactivity fee is the lamest thing I have ever seen. @Bitstamp you deserve your failure, what a disappointment. I will toast with champagne when you will close your exchange for bankruptcy.
— NeoTokyoUnicorn (@UnicornTokyo) July 2, 2022
In short. No.
— k:Mr Metcalfe (@cryptometcalfe) July 6, 2022
Many wondered if this charge was a sign that Bitstamp was insolvent, given that it had resorted to taking money from customers who no longer wanted an exchange that had failed to move with the times.
After two days of backlash, Bitstamp realised that it had misread the room…spectacularly. On the day a certain British Prime Minister finally bowed to the most clear and obvious signs that he was no longer wanted, Bitstamp came to a similar realisation:
📣 We are not implementing the monthly €10 inactivity fee.
Thank you for speaking out, you have been heard.
And we’ve changed course as a result.
Read more 👇 https://t.co/SqXmYyaeSY
— Bitstamp (@Bitstamp) July 6, 2022
The right decision, but too late, and all so unnecessary. Lapsed customers, like this author, were merely reminded why we don’t use Bitstamp any longer, and any new users to the space will have this appalling lack of awareness as their first experience of Bitstamp, which will ensure they stay away for good.
Good TA, Bad PR
Bitstamp was sold to NXMH, a Belgium-based investment company, in October 2018, but retained the same CEO, Nejc Kodrič, who co-founded the exchange. Sadly, this PR blunder will have undone much of the good will that was left in Bitstamp, which is used by most people in the space as a good technical analysis backdrop given that its data goes back to 2011.
If any other exchanges were considering doing the same, the humbling experience of Bitstamp will have led them to the realisation that forcing people to use your services, and then charging them again when they do, is not the way to go about surviving a bear market.
