Art by: Jing Jin
A major Paypal executive is taking his talents to the Bitcoin industry, leaving payment processing giant Paypal to take a position at Bitstamp. Jean-Baptiste Graftieaux was Paypal's chief compliance officer (CCO) and will be taking the same position with Bitstamp.
As first reported by CoinDesk, Graftieaux worked for Paypal as their COO of their European, African and Middle Eastern divisions. As a CCO, Graftieaux would have been responsible for making sure Paypal fell in line with the financial laws of the localities that fell under his jurisdiction. Being responsible for portions of three different continents means he potentially brings over a wealth of international compliance knowledge to Bitstamp.
Regulation is undoubtedly one of the major issues facing Bitcoin exchanges and other companies. As the Bitcoin economy grows and becomes more mainstream, regulators are beginning to cast their eyes towards the digital currency. The larger companies, and Bitstamp certainly qualifies, will be the first to feel the effects of regulation and many of them are already preparing for what lies ahead.
If regulation does end up playing a big role in what companies define the bitcoin space in the coming years, Bitstamp may have pulled a major coup with the hiring of Jean-Baptiste Graftieaux.
Companies grabbing executives from more experienced competitors is an old practice, but it has proved especially effective in the technology space. One recent example is Hugo Barra leaving Google for Xiaomi. Since his arrival at Xiaomi last year, it has grown to the third largest cell phone manufacturer in the world, despite not selling phones in the United States.
I only bring that up because if regulation ends up slowing down Bitstamp's competition, but Graftieaux is able to move Bitstamp into new areas quicker, then its “first to market advantage” could be significant. Poaching experts from, not your direct competition, but older companies that have existed in a similar space for a long time, can be very effective.
Speaking to Coindesk, Graftieaux stated that he is indeed a bitcoin user and has been following the industry for a few years. He also stated that he would work to keep Bitcoin's core values intact while dealing with regulators from various countries.
Bitstamp has been working to increase its compliance with regulations, particularly when it comes to money laundering and Know Your Customer (KYC) laws. To this end, they began requiring customers to verify their identity by uploading a government issued ID. Users who still have not verified their identity have been threatened with a loss of their funds. This predictably led to outrage among some in the bitcoin community.
Still, regulation is coming in one form or another. While companies will find a way to fly under those regulations or will operate in countries that those regulations don't exist, the big dogs in the industry have a lot to gain by understanding and adapting to the regulations imposed by the current powers-that-be. BitStamp is positioning itself to lead the “regulation compliant Bitcoin companies” space, how many others will follow?