There are no crypto exchanges registered with FSCS, that's the problem. Only top forex brokers located in the UK, but you need to check that to be sure and have it black on white in paper.
I don't think Bistamp is liquid to handle huge amounts of withdrawals and probably not even solvent to do so. That's my opinion based on what has and still is going on and basic math + common sense.
Let's say, in theorem, that Bitstamp or any other crypto exchange has users that have 50% of Bitcoins mined and 50% - 1 are bought for $1. Now the last guy buys the bitcoin for $20k. The market cap of bitcoin rises to supply * last traded price. Let's say, supply of 17 million bitcoins and let's assume Bitstamp had a monopoly where all users will go to buy/sell bitcoin and have their entire account equity (deposits) used.
To use some simple arithmetic:
Bitstamp client deposits: 17m * 0.5 * $1 + 1 * $20k = $8.5 million + $20k = $8,520,000 ($8.52m)
Market cap from: 17m * $1 = $17m, to: 17m * $20k = $340,000,000,000 ($340b)
As you can see, the only way this is sustainable is that more people get in and buy around the same last price to maintain that market cap. Problem is, if price rises too fast vs their earnings from fees + third party capital investments + own equity AND people withdraw huge amounts at the same time(period), crypto exchanges cannot pay you out (i.e. a bank run). Unfortunately, most things rely on a ponzi scheme/pyramid structure in life. The only one who can 100% guarantee it to pay out is the central bank. If they don't have enough fiat, they just print or put more digits in.
Things will really go south when theft occurred (i.e. a hack). Not implying this has happened, just having an open mind and mature discussion here.
As the top forex brokers offering you an insurance in case things go wrong, I don't think they will for cryptos if this continues without new big money coming in, while people cashing out. Therefore, there are only 3 crypto money licensed transmitter exchanges, where there could have been many more crypto fiat exchanges, ask yourself why this didn't happen. I know coinbase and kraken have huge reserves and bistamp had a lot of liquidity as well in the past, that's why everything went so smooth for years. But, when suddenly withdrawals and deposits don't go smooth and it's still not solved within a week, I'm worried and that's my argument. The same thing happens in the business world, hence the stalling of time.
I don't understand the logic, here.
Bitstamp gets fiat & crypto in & out. They don't buy crypto, they don't sell crypto, they merely reassign fiat & crypto to various people *within* Bitstamp.
Doesn't matter if someone deposits 1 million BTC's to Bitstamp, he will only be able to withdraw them as fiat, if there are buyers *within Bitstamp*.
All they do is reassigning stuff. Bitcoin falls to zero? Doesn't matter a single bit, unless of course they have lost the BTC's they are supposed to have, from hacking. And even here, people would have lost their BTC's, not their fiat. Can't imagine "hacking fiat" out of Bitstamp (how?).
With no leverage, and with real eur/usd instead of tethers, I cannot imagine any way for Bitstamp to lose money, unless it costs them more to run than what fees bring, but with the highest fees out of any exchange, I can't imagine that being the case, at all. If people like myself have paid thousands for months, for what's basic exchange coding, well..
I can only think of 2 ways for Bitstamp to have money problems:
-hacking
-stealing/running away with money
Both having happened to exchanges in the past..
I can really imagine problems with margin trading+tethers, but the only margin trading BS is supposed to have is only in beta, used by a couple of users. I don't think THAT would have already brought BS down.
So, BS only plays with what they have. If they have lost their BTC's, then it's remote hacking or internal fraud. If they have lost their fiat, then it's internal fraud. If they sell more BTC than they have, then it's internal fraud. But in any case, it has to be fraud, not any "logical problem with crypto". Doesn't matter if crypto crashes or rises, for exchanges, they make money both ways.