Luxembourg-based cryptocurrency exchange Bitstamp has scrapped plans to implement an inactivity fee after widespread outcries from users online.
The exchange had previously announced at the end of June that it would enforce a €10 ($1fee on inactive users on its platform with account balances valued at €200 ($204.08) or less from the beginning of August.
The inactivity fee was due to be applied to users of Bitstamp Limited and Bitstamp Global Ltd from Aug. 1 and for customers of Bitstamp Europe S.A. from Aug. 6. Bitstamp users based in the United States were exempt from the proposed fee, according to the company’s fee schedule.
The move was met with condemnation from users on social media, with prominent cryptocurrency accounts among the chorus of voices hitting out against the exchange’s proposed plans.
This is so disappointing BitStamp— Crypto Bitlord (@crypto_bitlord7) July 3, 2022
-It’s actually pathetic.
You’re charging the lowest holders approx 5% of their account balance so they are “forced” to trade or stake with you!!??
How is this even legal
Cointelegraph reached out to Bitstamp to ascertain why the initial decision was taken to implement the inactivity penalty and whether the current downturn across cryptocurrency markets played a role in the now-scrapped move.
A spokesperson from the exchange cited administrative costs incurred by maintaining inactive accounts as the primary reason for implementing the proposed inactivity fee. Bitstamp had been considering the idea since last year while reaffirming that current market conditions did not play a role in the move.
The spokesperson agreed that there was turmoil across the crypto markets but noted that Bitstamp has "zero exposure to any of these companies, that our financial position remains strong and healthy, and that we are continuing to invest in our product and technology.”
The company has since removed the initial announcement from its website and social media accounts but the Bitstamp fee schedule page still reflects the details of the inactivity fee. The company also confirmed that some users had requested to close their accounts after the initial announcement of the proposed fee.
Users that had been inactive for more than a year would have had to buy or sell cryptocurrency on the exchange, make a fiat or cryptocurrency deposit or withdrawal or stake on Bitstamp Earn to avoid incurring the fee.
Bitstamp had planned to deduct €10 from an inactive user's fiat currency balance, or the equivalent amount from their cryptocurrency holdings if their fiat balance was lower than the penalty.