XPMarket CEO and founder Dr. Artur Kirjakulov has publicly accused Bitstamp of conducting a “carpet pull” on the XRP community. This serious accusation has sparked a contentious debate among industry stakeholders, raising questions about the stability and reliability of Bitstamp’s involvement in XRPL-based financial instruments.
Did the Bitstamp Rug pull the XRP community?
On Sunday, November 17, Dr. Kirjakulov expressed his concerns about Bitstamp’s recent actions on X. “Bitstamp has literally just carpet-pulled the XRPL community,” he claimed, asserting that Bitstamp has “withdrawn over 90% of liquidity from the USD/XRP and BTC/XRP AMM pools,” a move he described as a “silent” and unannounced strategy that puts the XRPL community in a precarious position.
According to Kirjakulov, the lack of any formal statement from Bitstamp or RippleX exacerbated the uncertainty surrounding this liquidity extraction, potentially leading to 'extreme volatility' trading conditions and significant price impacts for these asset pairs.
Dr. Kirjakulov further emphasized the intricate relationship between Ripple and Bitstamp, pointing out that "Ripple owns shares in Bitstamp. This connection suggests that Ripple's stake in Bitstamp could influence the exchange's strategic decisions in the XRPL space. The CEO of XPMarket expressed deep concern over Bitstamp's guarantee of a 1:1 conversion rate for issued wrapped assets, likening it to the Stably incident where such guarantees were not honored. He stressed, 'How can we trust DeFi on XRPL when official partners take such actions? The optics are terrible.'
These allegations have not gone unnoticed in the XRPL community. Eminence's Chief Technology Officer and XRPL ambassador Daniel Keller expressed skepticism about the truth of Kirjakulov's claims. Keller questioned the legitimacy of the account related to the liquidity pool, saying, "Do we know that was the official Bitstamp account? Looking back at the activation sequence, it was activated through Binance, and if Bitstamp is running it, that's strange."
In response, Dr. Kirjakulov insisted that the accounts in question indeed belong to Bitstamp. He clarified, "It is clear from these accounts that they have a strong connection to Bitstamp, as they are also making a market for these tokens. Very few people are interested in making a market for these tokens because they are niche and unpopular."
He further explained that liquidity has been pulled back to the market maker (MM) accounts, reinforcing his claims of Bitstamp's direct involvement. Kirjakulov also dismissed the importance of activating accounts, noting, "Activating accounts makes no sense. I specifically activate my accounts from multiple exchanges to reduce traceability."
Keller asked for more specific evidence to support these claims. He inquired, "Can you share some of those connecting trades? Because if you have already looked them up, sharing would be cool. If you are an exchange supporting LP, then activating accounts is very important because you want people to know this is your company."
Dr. Kirjakulov responded regarding the strength of the indirect evidence pointing to Bitstamp, saying, "Indirect evidence? Yes. But this evidence clearly points to Bitstamp because no one else, besides their affiliates, holds such a large amount of these assets they issued. Indirect evidence is not an excuse to ignore them."
The discussion extended to the topic of Bitstamp's IOU service. X user Michael Nardolillo defended Bitstamp by emphasizing its regulated status and the redeemability of its IOUs. He argued, "Isn't it guaranteed that Bitstamp will redeem their IOUs?! That's like saying it's not guaranteed you can withdraw your cryptocurrency from an exchange. Bitstamp is highly regulated, and notes are always redeemable; they are no different from holding assets on an exchange."
This defense was met with skepticism from Kirjakulov, who pointed out past failures in the industry. He rebutted, "FTX creditors made a few rounds somewhere. Similarly, Stably did not respect the 1:1 conversion. Bitstamp and even GateHub have not claimed there would be a 1:1 conversion, and absolutely no proof of funds."
To support his defense, Nardolillo shared a screenshot from the Bitstamp website detailing their IOU service. The screenshot outlined how users can transfer value on the XRP Ledger through IOUs issued by Bitstamp in exchange for physical assets such as BTC, USD, EUR, or ETH.
Dr. Kirjakulov emphasized a key oversight in this arrangement. He said, "That's the problem. This is the only way you can make this exchange. Additionally, it does not mention the 1:1 conversion at all. What if decoupling is 50%? Will they exchange 1 bUSD (worth 50 cents) for 1 USDT (worth 1 dollar)?"
As of the time of writing, the XRP community is awaiting an official response from Bitstamp. The trading price of XRP stands at $1.15.
