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Dr. Artur Kerjakulov, CEO and Founder of XPMarket, said this publicly accused Bitstamp is carrying out a “rug pull” against the XRP community. This serious allegation has ignited a contentious debate among industry stakeholders, raising questions about the stability and reliability of Bitstamp’s participation in XRPL-based financial instruments.
Has Bitstamp Rug pulled the plug on the XRP community?
On Sunday, November 17, Dr. Kerjakulov took to X to express his concerns about Bitstamp’s recent actions. “Bitstamp has literally withdrawn the This left the XRPL community in a precarious situation.
According to Kyrgyakulov, the absence of any official statement from Bitstamp or RippleX exacerbates the uncertainty surrounding this liquidity withdrawal, which could lead to “extremely volatile” trading conditions and significant impacts on the prices of these asset pairs.
Dr. Kerjakulov also highlighted the complex relationship between Ripple and Bitstamp, noting that “Ripple owns an equity stake in Bitstamp.” This correlation suggests that Ripple’s stake in Bitstamp may influence the exchange’s strategic decisions within the XRPL space. XPMarket CEO expressed deep concerns about the 1:1 conversion rate guarantee for pooled assets issued by Bitstamp, resembling the Stable incident where these guarantees were not respected. He asserted: “How can anyone trust DeFi on XRPL, when official partners are making such moves? The optics are terrible.”
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These allegations have not gone unnoticed within the XRPL community. Daniel Keller, Eminence’s chief technology officer and XRPL ambassador, responded with skepticism regarding the veracity of Kerjakulov’s claims. Keller questioned the legitimacy of the accounts linked to the liquidity pools, saying: “Do we know this is an official Bitstamp account? Looking back at the activation sequence, it was activated via Binance, which is weird if Bitstamp ran it.”
In response, Dr. Kerjakulov confirmed that the accounts in question were indeed affiliated with Bitstamp. “By reviewing the accounts, it’s clearly linked to Bitstamp, because they also make these tokens in the market,” he explained. “There is literally no one else here interested in making these tokens in the market, because they are niche and unpopular.”
He further explained that liquidity was withdrawn back into the Market Making (MM) account, strengthening his assertion of Bitstamp’s direct involvement. Kerjakulov also denied the importance of activation calculations, stating that “the activation calculation means nothing. I activate my account from multiple exchanges specifically to reduce traceability.”
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Keller pressed for more concrete evidence to support the allegations. “Can you share some of these connected transactions because if you actually looked them up it would be great to share,” he asked. The activation account is very important if you are an exchange that supports an LP, because you want people to know that it is your company.
Dr. Kerjakulov responded by emphasizing the strength of the circumstantial evidence pointing to Bitstamp, saying: “Circumstantial evidence? Yes. But this evidence clearly points to Bitstamp, as no one has such a huge amount of these assets issued by them, other than someone affiliated with them. Circumstantial evidence is no excuse to ignore it.
The conversation extended to the topic of Bitstamp’s IOU services. Michael Nardolello, an X user, defended Bitstamp by highlighting its regulatory status and the redemption of its debt securities. He said: “There is no guarantee that Bitstamp will honor its IOUs?! This is like saying that there is no guarantee that you can withdraw your cryptocurrencies from an exchange. Bitstamp is highly regulated, and IOUs are always redeemable and no different than holding an asset on an exchange.”
This defense was met with skepticism from Kerzhakulov, who drew attention to the industry’s past failures. He responded by saying: “Somewhere, FTX’s creditors got some punches in the face. Once again, Stable did not honor the 1:1 transfer. There is nothing in Bitstamp’s sources or even GateHub claiming that there will be a 1:1 transfer and there is absolutely no evidence whatsoever.” On the money.
In an attempt to prove his defence, Nardolillo shared a screenshot from the Bitstamp website detailing their IOU service. The screenshot shows that users can transfer value on the XRP Ledger through IOUs issued by Bitstamp in exchange for real assets such as BTC, USD, EUR, or ETH.
Dr. Kerjakulov highlighted the crucial oversight in this arrangement. He said: This is the problem. This is the only way you can make this swap. It also says nothing at all about 1:1 conversion. What if the rating is canceled by 50%? Are they going to exchange 1 bUSD (which is equal to 50 cents) with 1 USDT (which is equal to 1 US dollar)?”
As of press time, the XRP community is awaiting an official response from Bitstamp. XRP was trading at $1.15.
Featured image created with DALL.E, a chart from TradingView.com
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