CoinIQ

BITBOX Review – Low Liquidity, but Also Low Fees

BITBOX in Brief

BITBOX is a new cryptocurrency exchange that was built by the same company that created the freeware VOIP and messaging app known as LINE. The fact that BITBOX was created by an established company and not a startup is probably an advantage for its users, since LINE has resources and experience that many startups do not.

BITBOX’s most notable features include support for over 50 cryptocoins and integration with LINE’s LINK token. LINK will eventually let BITBOX traders enjoy commission fee discounts and other perks. Even without LINK discounts, crypto traders enjoy a relatively low 0.1% base commission rate.

The main downside of BITBOX for Americans is that it’s not available in the US yet. LINE wants to make sure that it meets all the necessary regulatory requirements before it enters the US market. In addition, BITBOX’s lack of support for government-issued currencies may be a stumbling block for people that are new to cryptocurrency trading. Another possible pitfall: BITBOX has opted to support Tether (USDT), a dubious stablecoin that’s backed by Bitfinex. Given the perpetual controversy around Tether, it’s surprising that BITBOX decided to list it instead of Circle’s USD Coin or the Winklevoss twins’ Gemini Dollar.

Pros

  • Perks and rewards. The first 2 million people that sign up for BITBOX will get a credit worth $10 USD, which can be used toward crypto purchases on the exchange. In addition, traders that use LINE’s LINK token to place a trade will soon be able to receive commission rebates.
  • Low fees. BITBOX doesn’t offer commission discounts to high volume traders, but its low 0.1% flat commission fee is low compared to the competition.
  • Built by an established company. BITBOX is one of the few cryptocurrency exchanges that was founded by a corporation. Most crypto exchanges were started by small teams.
  • Slick looking interface. The same UX designers that worked on the popular LINE communication app helped create BITBOX’s interface. The interface is not particularly beginner friendly, but it is fast and modern looking.

Cons

  • Not available in the US. The exchange is still in the process of figuring out how it will comply with US regulatory standards.
  • Low liquidity. The fact that very few people are trading on BITBOX could mean that traders have to deal with supply-and-demand issues, price slippage and other problems.
  • Live support is not available yet. The English version of BITBOX has a chatbot that you can interact with, but its functionality is very limited and live support doesn’t seem to be up and running yet.
  • Supports controversial stablecoin Tether (USDT). Even though more reliable stablecoins are now on the market, BITBOX decided to list Bitfinex’s controversial USDT.

What is BITBOX?

History

BITBOX’s opening day was July 16, 2018. However, the history of LINE– the corporation behind BITBOX– dates back to 2000. LINE’s most well known product is a smartphone, PC and Mac app that allows its users to message and call each other for free. Other popular projects include a YouTube-like video platform called LINE Live, a music streaming service called LINE Music and a news aggregator called LINE News.

BITBOX Project Manager Edward Lee provided the following comment about the exchange’s launch to Bitcoin Magazine:

“The launch of BITBOX is part of our long-term strategy to become a leader in fintech services, and it shows our commitment to fulfilling the growing demand for more diverse financial options. We are trying to provide a user-friendly service for those who may have felt intimidated by the world of cryptocurrency. With BITBOX, Line users will be able to access cryptocurrencies more easily, while also being assured of state-of-the-art security measures to protect their assets. In addition, we also plan to develop a mobile version of social features for BITBOX.”

Leadership

  • Edward Lee – Project Manager. Lee is a registered US Patent Agent who specializes in mobile games and apps. Before BITBOX, he was Head of Growth at Value Creators & Company. VCNC created a relationship app for couples called Between.
  • Joash Wee – Business Development. Wee has over 10 years of experience managing various kinds of development teams. Before joining BITBOX, Wee was the Head of Global Operations at VCNC.
  • Song Ah Kim – CS / KYC Manager. Kim was the CRM Manager at Korbit, Korea’s first cryptocurrency exchange.
  • Jungyoun Hwang – Software Engineer. Hwang was a Development Team Manager at Chosun Biz. His areas of expertise include dApp development, Android and iOS development and blockchain.

Protecting customers’ coins

Legal and regulatory compliance

BITBOX is registered in Singapore– a country that has taken a decidedly hands-off approach to the regulation of cryptocurrency. Because BITBOX doesn’t support fiat deposits, it has minimal regulatory burdens.

This knowledge base article provides further details about BITBOX’s legal status:

“BITBOX is currently not regulated by the Monetary Authority of Singapore as a financial institution, and as such, deposits in your Hosted Wallet are not considered as deposits under the laws, rules or regulations applicable in your jurisdiction. They are also not legal tender, and are not backed by any government, and the Hosted Wallet balances are not subject to deposit insurance and investor protections.”

Coin listing policies

BITBOX’s listing/delisting policy document indicates that the company consults with only high quality legal firms before it decides to list a cryptocoin:

“Our compliance review typically requires the applicant to provide a legal opinion from a Tier 1 or Tier 2 Singapore, Hong Kong, or UK law firm in regulatory, capital markets, banking and finance and other related fields, as identified by Chambers and Partners or Legal 500 rankings.”

BITBOX’s lawyers decide whether or not the prospective coin could be considered a security. Securities face more regulatory scrutiny compared to utility tokens and other types of cryptocurrency assets. If the coin passes BITBOX’s legal smell test, it then gets evaluated for whether or not it’s truly innovative. To pass that hurdle, the prospective coin’s team has to prove that it’s using blockchain technology in a unique way.

Given the attention that BITBOX claims it pays to coins, it’s hard to understand why the exchange decided to list Tether. Tether is a stablecoin that’s designed to match up with the US dollar. But recently, the price of Tether slipped below the $1 mark amid accounting concerns and rumors about deteriorating fiat bank relationships. The stablecoin’s skeptics are convinced that the cryptocurrency isn’t fully collateralized.

Network security

Two-factor authentication is a mandatory part of BITBOX’s ID verification process. This makes it difficult for hackers to create swarms of fake accounts and use them to manipulate the BITBOX marketplace. In addition, 90 percent of BITBOX’s user assets are held in cold storage. The remaining hot wallet assets are backed up with cryptocurrency insurance coverage. BITBOX also advertises that it uses a “24-hour surveillance system” to track the exchange and notify users and executives in the event of any suspicious trading activity.

This notice contains further details about BITBOX’s security protocols:

“To protect your digital assets, BITBOX maintains a wide variety of security measures, including securing digital assets through a combination of online and offline wallets. BITBOX draws its security expertise from LINE’s strong history and resources. In addition, BITBOX is cooperating with S&P A+ rated third party insurance underwriters to protect the digital assets we maintain in online storage.”

Customer Support

The English version of the BITBOX support site contains much less information than the exchange’s competitors. There is a support chatbot, but its functionality is very limited. The chatbot is designed to summon a human customer support agent when necessary, but this feature doesn’t seem to be fully implemented yet. Help requests can be submitted through a self-service ticketing system.

BITBOX reputation

People in North America and Europe don’t seem to be aware of BITBOX yet. The BITBOX subreddit only has 16 subscribers. However, BITBOX’s Twitter account has over 4,000 followers and BITBOX’s official Korean language Telegram channel has over 1000 members.

The LINE chat app has high ratings on Android and Apple’s App Store as well as almost half a million likes on Facebook.

How to Join BITBOX

Who can join?

As mentioned above, BITBOX is not available in the United States. The company even blocks all United States IP addresses, which is a conservative approach to keep US citizens from using the exchange. These countries and regions are also not supported:

Belarus, Bosnia and Herzegovina, Burundi, Central African Republic, Crimea area, Cuba, Democratic People’s Republic of Korea (North Korea), Democratic Republic of the Congo, Eritrea, Ethiopia, Iran, Iraq, Japan, Libya, Russia, Somalia, South Sudan, Sri Lanka, Sudan, Syria, Trinidad and Tobago, Tunisia, Vanuatu, Venezuela, Yemen, and Zimbabwe.

Verification

Individual accounts

BITBOX’s account verification process consists of five steps: email verification, phone number verification, two-factor authentication and ID verification.

A passport is the only type of ID card that BITBOX will accept. You have to submit a photo of yourself holding the passport to complete the verification process.

Business accounts

BITBOX doesn’t have a separate process for on-boarding business customers.

What Can You Trade on BITBOX?

Cryptocurrencies

BITBOX supports over 50 cryptocoins. The full list is available here.

Fiat currencies

BITBOX currently doesn’t support USD or any other government-issued currency.

Currency exchanges

Over 50 different trading pairs are available. The three main markets are BTC, ETH and USDT.

Advanced trading

BITBOX’s advanced features include detailed charts (candlestick, line, mountain, colored bar, hollow candle), limit orders and API access. Customers that want to use BITBOX’s API have to apply.

Trading Tools and Fees

Trading interface

BITBOX’s interface is fast and features an elegant design that packs a large amount of information into a small space. The real-time charts have more features compared to competing exchanges. The box on the right side of the screen lets you quickly select or search for a trading pair. You can save the trading pair by clicking the star icon on the top left side of the screen.

Source: CoinIQ

If you scroll down, you’ll see tabs that will let you buy or sell cryptocurrency. A box on the left side of the screen lets you toggle between open orders and trade history views.

Source: CoinIQ

Mobile app support

BITBOX doesn’t have any official native apps, but the BITBOX website looks good on mobile devices.

Source: CoinIQ

Deposits and withdrawals

Fiat currencies

As mentioned above, BITBOX doesn’t support any fiat currencies.

Digital currencies

All cryptocoin deposits are free. Withdrawal fees vary depending on network traffic. The fee schedule is available here.

Transaction fees

BITBOX charges a flat 0.1% fee for all trades. Trades involving the LINK token will eventually receive commission discounts. Other benefits, like airdrops for LINK holders, provide another reason for traders to buy LINK.

Final Word

BITBOX is small now, but it may have big potential. Low fees and other attractive features like the in-house utility token LINK may help it grow. Also, BITBOX is headquartered in a very crypto-friendly country. If LINK continues to improve and promote BITBOX, it could eventually compete with the major crypto exchanges. One strong advantage that BITBOX has over the competition is the fact that it’s owned by search giant LINK– the Korean language version of Google.

To succeed, BITBOX will need more advanced features– and more users. The biggest issue with the exchange at the moment is its low liquidity. The addition of margin trading and other advanced features could help reel in more frequent traders. The fact that BITBOX will eventually give commission discounts for trades involving LINK is a plus, but that feature isn’t available yet. Adding more tutorials and improving the knowledge base may help bring more casual and beginner traders into the fold.

For new traders

If you’re completely new to trading, you may want to learn the ropes with a different exchange. The English language version of the support website only has a few basic help articles. In addition, there are no pop-up boxes to help explain the various parts of the BITBOX interface.

For advanced traders

Experienced traders will appreciate BITBOX’s advanced charts and low 0.1% commission fees. The fact that you have to apply to get access to the API may be somewhat of a hassle, though. Another big downside is that the fact that not many people are trading on BITBOX yet. The exchange’s extremely low liquidity makes day trading difficult.

Alex Munkachy

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