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CEX.IO review

CEX.IO Review: Great Option for Europe but Limited US Support

CEX.IO in Brief

Founded in 2013 by Ukrainian software developer, Oleksandr Lutskevych, CEX.IO became popular as the exchange service of cloud-based bitcoin mining system GHash. As an independent exchange, CEX never reached the trading volumes of industry leaders like Coinbase, but remains a solid option for crypto traders, especially in Europe.

Pros

  • 4 fiat and 8 digital currencies
  • Margin trading
  • Never been hacked
  • Accepts non-US Visa and Mastercard

Cons

  • Only Euro wire transfers are fully supported.
  • Limited support in the United States.

What is CEX.io?

CEX benefits
Source: CEX.IO

History

Oleksandr Lutskevych and some fellow programmers developed a cloud-based bitcoin mining system, GHash, which they launched in 2013. They added an exchange feature, CEX, to let their customers more easily withdraw their coins.

Two years later, with more than 75,000 users, collapsing bitcoin prices had made GHash’s mining system unprofitable. Lutskevych decided to shut down the mining system and focus instead on growing the CEX exchange operations.

New features like margin trades, affiliate programs, and support for credit card-based deposits and withdrawals drove CEX’s growth. By 2016, the company had more than 700,000 users and processed more than $80 million in payments to customers’ credit cards.

As with so many other exchanges, 2017 proved to be a challenge for CEX. By the middle of the year, the exchange passed the 1,000,000 user mark. By the end of the year, it was adding 100,000 new users every week.

Customer complaints skyrocketed as CEX’s processes failed to keep up. The exchange was hiring more support staff, but not fast enough to solve the problem. CEX finally stopped accepting new customers in December 2017 to give its teams time to work through the backlog. More staffing and the falloff in the crypto markets has since allowed CEX to resume new registrations.

Throughout its history, however, CEX was never hacked. The company takes pride in the fact that none of its customers have ever had their coins stolen.

Leadership and investors

Lutskevych drew from the Ukrainian software industry and startup community to build his executive team.

  • Oleksandr Lutskevych, Chief Executive Officer: Lutskevych was a freelance software developer before starting CEX. He is also a limited partner in GrowthUP+, a venture seed fund.
  • Angelina Nagaylenko, Chief Communications Officer: Nagaylenko joined CEX as a marketing strategist in 2014 before her promotion to CCO in 2015.
  • Eugene Kovalyk, Chief Marketing Officer: Kovalyk launched his career in mobile software development before jumping into the Ukrainian startup scene. He joined CEX last year and still remains involved in the companies he co-founded.

CEX is privately held and few details about its investors are publicly available.

Protecting customers’ coins

CEX security features
Source: CEX.IO

Trust is the watchword at CEX. The exchange has developed technologies and processes that earn the trust of its customers — as well as the government watchdogs eyeing the cryptocurrency industry. As CEX explains:

“Throughout the history of our company, none of our users ever experienced account funds theft”

Legal and regulatory compliance

CEX registered itself as a Money Services Business with the United States Department of Treasury’s Financial Crimes Enforcement Network. That obligates the exchange to apply a full suite of security measures, including Know Your Customer (KYC) and Anti-Money-Laundering (AML) procedures.

In early 2018, CEX joined Coinbase, BlockEx, Coinfloor, CoinShares, CommerceBlock, CryptoCompare and eToro to create the industry group CryptoUK. The group’s objective is to help British politicians and regulators develop “appropriate regulations” that will keep the UK’s crypto industry healthy.

Much of CryptoUK’s advocacy will center on letting the industry regulate itself. A code of conduct lays out patterns of behavior its members must follow:

  • Pursue supportive and appropriate regulations.
  • Advance the use and development of cryptocurrencies
  • Minimize consumer risk and counter illegitimate activity
  • Develop honest relations with customers
  • Conduct fair, clear communications with customers
  • Publish complaint procedures, identify senior management, and a registered address
  • Perform due diligence when adding investors
  • Develop secure systems to protect customer data and assets
  • Do not mix customers’ fiat holdings with company funds
  • Work with law enforcement when a customer breaks the law
  • Verify customer identities and watch for money laundering attempts
  • Halt trading whenever suspicious activity occurs.

CEX itself seems to comply with most of the code of conduct, although it has yet to publish the names of its senior management.

Coin listing policies

CEX is not a place where any new coin can get listed. It wasn’t until 2017 that the exchange listed Ripple, a project that has been around longer than CEX itself. CEX does not publish criteria for adding new listings, but high volume and a large, established community are clearly part of it.

Network security

CEX does not disclose much about its security processes, which may be why the exchange has never been successfully hacked. Most of its customers’ digital assets are kept in secure cold wallets with only enough funds in hot wallets to ensure the exchange’s liquidity.

2-Factor Authentication protects access to your account using either the Google Authenticator app or less secure SMS messaging.

Customer support

The primary support option for CEX customers is the self-support site. Novice traders can turn to guides and other introductory articles that will help them execute their first trades. Experienced traders will appreciate the detailed articles about more advanced features.

The only other support option CEX supports is a ticket-based system. You can access it through the CEX website or through CEX’s own mobile apps.

CEX does not have a call center. Any communications you get that ask you to call are phishing attempts.

CEX reputation

CEX has a solid reputation as a safe place to make crypto trades. Like every other exchange, the swarm of new users in 2017 overwhelmed CEX’s internal processes. By the end of that year, new account requests had ground to a halt.

Suspending new account requests in late December gave CEX some breathing room. A hiring binge led to a tripling of the customer support staff — and a quadrupling of the verification staff.

How to Join CEX.io

Thanks to the larger staff, verifications and support times are getting back to normal. CEX re-opened its on-boarding process earlier this year, allowing almost anyone to trade on the exchange.

Who can join?

CEX has customers in almost every country, with the exception of those on the British government’s sanctions list.

Things are more complicated for Americans thanks to the fragmented nature of US financial regulation. Residents of only twenty-two states, the District of Columbia and Puerto Rico can use CEX. The eligible states include California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Indiana, Kentucky, Maine, Massachusetts, Minnesota, Missouri, Montana, Nevada, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Utah, West Virginia and Wisconsin.

The opposition of most American banks to anything cryptocurrency related also limits what US customer can do. Wire transfers are not available. Neither are deposits or withdrawals from credit cards issued by US-based banks. However, Americans can use an internationally issued credit card to conduct fiat transactions with CEX.

Verification

CEX Verification selfie
Source: CEX.IO

CEX has cooperated with regulators in the United States, Great Britain and the European Union to ensure the exchange complies with AML regulations and the financial industry’s best practices. The latest EU regulations, the 4th Anti-Money-Laundering Directive, required CEX to verify all of its customers, not just the ones who use fiat currencies.

Customers, of course, complained about the intrusive reporting requirements. Their concerns prompted CEX to issue a statement explaining the situation:

“Still, to stay compliant with the 4th AML Directive and ensure we are acting legally, we are obliged to make verification mandatory for all users. This is the only way to ensure a safe and healthy trading environment on our platform. “

Individual accounts

All CEX customers who submit to the verification process must provide a copy of a government-issued identification document, proof of residency, and their name, contact information and date of birth. They must also submit a selfie in which the same identification document is clearly visible.

What Can You Trade on CEX.io?

CEX accepts MasterCard and Visa
Source: CEX.IO

Cryptocurrencies

CEX lists eight cryptocurrencies: Bitcoin, Bitcoin Cash, Bitcoin Gold, Dash, Ethereum, Ripple, Stellar and Zcash.

Fiat currencies

CEX accepts transfers in US dollars, British pounds, euros, and the Russian ruble.

Currency exchanges

You can’t use every fiat currency to purchase every cryptocurrency CEX lists. The ruble only pairs with Bitcoin. The remaining three also pair with Bitcoin Cash, Ethereum, Dash and Zcash. Only the dollar and euro pair with Bitcoin Gold, Ripple and Stellar.

Advanced trading

CEX allows margin trading on BTC/USD, BTC/EUR and ETH/BTC pairs. Traders can leverage their orders at rations of 1:2 and 1:3 with automatic borrowing and negative balance protection.

A full set of APIs is available to CEX’s individual and institutional customers. A REST API gives individual traders an easy way to automate their trades. A Web Socket API gives professional traders full-duplex, real-time data transfers between their browser and CEX’s servers. Financial institutions can integrate the CEX cryptocurrency markets with their systems using a FIX API.

Trading Tools and Fees

Trading interface

The trading interface uses expanding menus to expose the markets in each exchange. In this case, you can see Bitcoin markets in all four fiat currencies. A time series plot shows pricing and volume at time intervals you can select. The red boxes represent trading-day losses and the green boxes trading-day gains.

CEX market price time series
Source: CEX.IO

Clicking on the “Chart” button opens a new window to explore trends in more detail. The drop-down menus at the top of the window lets you customize the chart, change the default studies, and mark up the charts with a drawing tool.

CEX trend analysis tool
Source: CEX.IO

Further down the main market data screen, you’ll find a depth chart to evaluate the market’s sensitivity to large orders.

CEX trading depth chart
Source: CEX.IO

Finally, tables of current orders give you a sense for what’s happening in the market.

CEX market order snapshot
Source: CEX.IO

The Margin Trading section of the site lets you place your leveraged positions.

CEX margin trading
Source: CEX.IO

Mobile app support

CEX mobile apps
Source: CEX.IO

CEX has mobile apps for both Android and iOS. Both let you track pricing, conduct card-based transactions, manage your account, and communicate with customer support.

You can also place and manage both market and limit orders, but you can’t conduct margin trades with the apps.

The apps have fairly low scores, 2.5 stars for iOS and 3.0 stars for Android. But those scores aren’t exactly a fair representation of the app. Many of the 1-star reviews start off by saying the app is fine before complaining about delays in verification or slow responses from customer support.

One irate iOS user, for example, requested verification on a Friday and entered a 1-star review on Sunday.

Deposits and withdrawals

CEX deposit and withdrawals
Source: CEX.IO

Fiat currencies

The rapid growth in new accounts in 2017 also disrupted CEX’s ability to handle cash. The third-party companies that handled dollar and pound wire transfers, for example, could not handle the volume. CEX suspended dollar and pound wire transfers, leaving euro-based SEPA transfers as the only bank option.

Regardless of the method, CEX enforces a 48-hour waiting period before unverified users can withdraw fiat currency. All American users must be verified to make fiat withdrawals.

Verification also determines the size of fiat currency deposits and withdrawals. Unverified customers outside the United States, for example, can only deposit $3,000 per month using credit cards while verified customers can deposit $30,000 per month.

Digital currencies

CEX does not charge for digital currency deposits.

Transaction fees

CEX transaction fees
Source: CEX.IO

CEX has a sliding maker/taker fee schedule that rewards people who put liquidity in the market (makers) and rewards high-volume traders. The fees for makers, for example, scale from 0.16% on accounts that trade less than 5 Bitcoins in a 30-day period to 0% for volumes higher than 6,000 Bitcoins. Taker fees scale from 0.25% to 0.1%.

Margin traders also get charged for opening and rolling over their positions. The fees vary based on the currency-pair and the amount of leverage. CEX does not charge you when your order closes.

CEX encourages active trading and penalizes customers who park their funds on the exchange. Daily storage fees get assessed on each currency you hold. (They’re buried in section 12 of the terms of service.) Dollar balances are charged $2 per day while Bitcoin balances are charged BTC 0.003 per day.

Earn Bitcoins

CEX has two programs that let you earn Bitcoins. A referral program will pay you a 30% commission on the trading fees generated by friends you bring into the exchange. The donation program lets non-governmental organizations, startups and bloggers add a Donate Bitcoin button to their websites.

Final Word

CEX is small compared to huge exchanges like Coinbase. The features CEX offers – such as markets in fiat currencies and mobile apps that support order placement – make the exchange a solid option for advanced traders. Now that CEX has worked through its staffing bottleneck, the exchange is back to delivering the service that made it so popular.

For new traders

CEX gives novice traders a lot of resources to help them join the crypto community. The frequent, informative blog posts and a well-documented support site will help self-motivated customers get up to speed on how CEX and cryptocurrency trading works. The simple interface makes buying into the crypto market and placing your first trades a straightforward process.

For advanced traders

CEX should be attractive to experienced traders who are looking for high-volume, mainstream coins as well as the ability to maximize their profits through margin positions.

Christopher Casper

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