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CoinSmart Review – This New Canadian Exchange Shows Promise

CoinSmart in Brief

CoinSmart— a new Canadian crypto exchange that opened its doors last summer– hopes to attract both experienced cryptocurrency traders and cryptocurrency newbies. Its interface is far more user-friendly than market leader QuadrigaCX, but CoinSmart’s high transaction fees may discourage experienced traders from switching over.

Convenience features, such as CoinSmart’s built-in tax calculator, are key differentiators. In addition, CoinSmart promises speedy and hassle-free deposits and withdrawals. Because some Canadian exchanges have rocky relationships with Canada’s “big five” banks, deposit and withdrawal delays are common issues. If CoinSmart proves to be faster and more reliable than the leading Canadian crypto exchanges, it may have a bright future.

Pros

  • Fast verification. CoinSmart’s quick ID verification system lets you start trading within an hour or two.
  • Tax assistance for Canadians. An automatically generated form helps Canadians figure out how much they should pay at tax time.
  • Backed by Luminus Financial. The fact that CoinSmart has a relationship with a Canadian bank means that there is less of a chance that there will be a problem with withdrawals and deposits.
  • Beginner-friendly interface. This exchange’s modern looking, intuitive interface is easier to use compared to typical crypto exchanges.
  • Advanced trading features. CoinSmart’s advanced features include real-time charts and the ability to place customized orders using order book functionality.
  • Live chat and phone support. CoinSmart is one of the few crypto exchanges that provides live support.
  • Altcoin support. In addition to bitcoin, CoinSmart supports monero, ethereum, litecoin, ripple, bitcoin cash and dash.

Cons

  • Above average fees. You have to be willing to pay more than what other exchanges charge in transaction fees if you want to use CoinSmart. The deposit and withdrawal fees are also quite steep.
  • No coin price source information. CoinSmart does not specify where it sources its spreads from.

Update 23/10/2018: Cons section updated.

Visit CoinSmart - $25 Free Bonus

What is CoinSmart?

History

In an interview with ETHNews, CoinSmart CEO Justin Hartzman provided this description of the niche that his company is seeking to fill:

“As a long-standing cryptocurrency investor, I have experienced first-hand how Canadians are under-served by existing exchanges. Platforms are unnecessarily complex, lack personal touch, and do not provide the tools and service support that consumers deserve. We used these issues as our design motivation and trust that CoinSmart fixes all these concerns allowing any investor – first time or not – to truly feel comfortable and secure.”

Speaking to Strategy, Hartzman said that his company’s main goal is to serve the needs of both expert traders and “crypto curious” people that are reluctant to try investing in cryptocurrency.

The company is also building a portable cryptocurrency information desk called a “Smart Bar.” CoinSmart intends to use the Smart Bar to inform the public about cryptocurrency and recruit new users. In addition, CoinSmart recently received approval to post ads to Facebook. It plans to use targeted Facebook ads to market to demographics that aren’t being served by other exchanges, like female baby boomers.

Leadership and investors

CoinSmart’s two co-founders have deep experience when it comes to internet marketing.

  • Justin Hartzman – Co-founder, CEO. Four years before co-founding CoinSmart, Hartzman co-founded an internet marketing company called NeedIs. In the early 2000s, Hartzman pioneered website brokering with a company called WeSellYourSite. He graduated from Western University with a Bachelor of Management and Organizational Studies.
  • Jeremy Koven – Co-founder. Koven co-founded NeedIs and WeSellYourSite with Hartzman. He studied finance at Dalhouisie University.
  • Edmund Lau – Technical Advisor. Lau was the CTO at DealTap and WorldGaming. He’s a software developer that specializes in product development, business strategies, architecture and culture building.

Protecting customers’ coins

Legal and regulatory compliance

Authorities in Canada and around the world are still in the process of formulating cryptocurrency regulations. However, CoinSmart claims that it’s willing to work with Canada’s regulators. This knowledge base article states that CoinSmart is doing everything it can to win their trust:

“At CoinSmart we take compliance very seriously and have an extensive Know Your Client and Anti Money Laundering Compliance program. Our team works with top industry lawyers and experts and keeps a close eye on the regulatory landscape for any upcoming changes. Recently FINTRAC presented proposed legislation for cryptocurrency exchanges which will include various Know your Client and reporting requirements. CoinSmart intends to apply to FINTRAC once the proposed legislation is enacted and will fully comply with any requirements that may be introduced.”

CoinSmart CEO Justin Hartzman made the following comment about regulation at a Fintech Canada conference:

“If we look at the S-curve of adoption, we’re still in the long tail of that. We’ll see ups and downs before we get to the inception point, and when we do, I think a lot of will change. Banks will be on board and regulators will be on board…we’ll all be regulated and blockchain will be huge.”

Coin listing policies

Though CoinSmart doesn’t seem to have a specific coin listing policy, this knowledge base article indicates that that the exchange does plan on adding new coins soon.

“We plan to add new coins regularly so keep an eye on this space for updates.”

Currently, CoinSmart only supports marquee coins with high trading volumes and good publicity. Lesser known and new coins aren’t available for trade.

Network security

CoinSmart advertises that it stores its customers’ funds in cold storage wallets:

“CoinSmart offers its users a cold digital wallet for each cryptocurrency offered on the exchange. Regardless of whether a user chooses to purchase a currency or not, there’s a cold wallet available. This wallet is protected using standard industry practices and procedures.”

In addition to that, CoinSmart works with Google Authenticator– a popular and secure 2FA (Two Factor Authentication) app.

Customer support

The vast majority of cryptocurrency exchanges rely on bare-bones customer support services. Most of the time, the first step to figuring out a problem involves checking the knowledge base for answers. If that fails, you have to create a trouble ticket and wait for a reply. CoinSmart, however, provides live customer support via both phone and chat. Like other cryptocurrency exchanges, it also provides a searchable knowledge base, an FAQ page and an information resource center.

Another notable aspect of CoinSmart’s customer service policy is its “SmartGuarantee.” CoinSmart promises to waive its withdrawal fee if your withdrawal request is not processed in 5 days or less. Similarly, CoinSmart claims it will waive your deposit fee if your deposit isn’t credited in a day.

CoinSmart reputation

It’s hard to gauge what the cryptocurrency community thinks about CoinSmart— or if they’re even thinking about it at all. The CoinSmart subreddit only has three subscribers. The CoinSmart Twitter account is active, but doesn’t seem to be driving much engagement.

How to Join CoinSmart

Who can join?

There is no information about whether or not CoinSmart works outside of Canada. CoinSmart’s ID verification system works with Canadian, Australian and British phone numbers. However, there is no information on the site that states whether or not Australia and the UK are supported countries.

Verification

Individual accounts

Step one of the verification process involves providing your full name, date of birth and verifying your phone number. The second and final step is sending in a picture of a government-issued ID card.

According to CoinSmart’s SmartGuarantee:

“If your account verification is not processed the same day it is submitted we will waive the deposit fee on your first deposit.”

Business accounts

CoinSmart doesn’t have a separate process for onboarding businesses and corporations.

What Can You Trade on CoinSmart?

Cryptocurrencies

Supported coins include bitcoin, bitcoin cash, litecoin, ripple, dash, ethereum and monero.

Fiat currencies

The Canadian dollar is the only fiat currency that CoinSmart supports. This knowledge base article explains why CoinSmart will not likely add support for additional fiat currencies:

“There are many advantages for CoinSmart and its users by sticking to CAD. The major advantage is that a lot of regulatory oversight can be streamlined and made transparent by sticking to a single currency. This can be extremely beneficial since CoinSmart is the only Canadian cryptocurrency exchange company that is backed by a Canadian bank! This means that the only fiat currency being handled by CoinSmart is CAD and the custodian for that CAD is also a Canadian bank. So you can be confident that your money is staying in Canada where you’re fully aware of the regulatory changes that can happen.”

Note: Another new Canadian exchange NDAX was recently able to secure the backing of a Canadian bank. Click here to read our full review.

Currency exchanges

CoinSmart lets you trade CAD for any supported cryptocurrency. This is advantageous because many exchanges only support fiat-bitcoin trades. This means that users of these exchanges have to place multiple trades if they want to exchange fiat for ethereum or some other altcoin.

Any supported currency can be traded with any other currency. However, CoinSmart classifies crypto-to-crypto trades that don’t involve bitcoin as “double trades.” These types of trades incur two separate commission fees.

Advanced trading

CoinSmart’s advanced features include order book functionality and real-time charts. API access is not available.

Trading Tools and Fees

Trading interface

CoinSmart gives you two trading options. You can either use SmartTrade, or the Buy/Sell/Trade dialog to place a trade.

The SmartTrade feature is a simplified trading interface that lets you buy and sell cryptocurrency with just a few clicks. Source: CoinSmart
Alternatively, you can use Buy/Sell/Trade to place an order. This gives you the ability to tweak your order and look at charts. Source: CoinSmart

Mobile app support

CoinSmart doesn’t have a dedicated app, but the website adapts to mobile devices.

Deposits and withdrawals

Fiat currencies

This CoinSmart knowledge base article lists the following fiat deposit options: wire transfer (1%), Interac email money transfer (2.5%), bank draft (2.5%) and Flexepin (3%). Of those options, only two of them (Interac and wire transfer) are currently available. The other options are listed as “coming soon” in the interface.

Source: CoinIQ

The fees associated with deposits are quite high. Several popular cryptocurrency exchanges offer free deposits. US-based exchange Kraken, for example, offers free Canadian domestic wire transfers.

Options for withdrawing fiat funds include EFT (2%) and wire transfer (2%).

Digital currencies

CoinSmart doesn’t charge any crypto deposit fees. However, it does charge 0.0005 BTC for bitcoin withdrawals, 0.005 ETH for ether withdrawals, 0.001 LTC for litecoin withdrawals, 0.002 XRP for ripple withdrawals, 0.005 DASH for dash withdrawals, 0.001 BCH for bitcoin cash withdrawals and 0.05 XMR for monero withdrawals.

Transaction fees

CoinSmart charges a 0.3% commission fee for all trades except trades involving two coins that are not bitcoin. Trades involving two coins that are not bitcoin are considered to be “double trades” and incur a 0.6% fee. There are no commission fee discounts for high volume traders.

Final Word

CoinSmart is trying to cater to both experienced traders and newbies. The new exchange is already quite beginner-friendly, but it probably needs more advanced features and lower fees if it wants to attract the professional crowd.

For new traders

CoinSmart looks nice and it’s easy to use, but credit card support– a popular feature among beginner-oriented exchanges– is currently not an option. On the other hand, CoinSmart is one of just a handful of exchanges that has a live support team.

For advanced traders

Experienced crypto traders will probably be turned off by CoinSmart’s high commission fees. CoinSmart competitor Coinsquare offers commission fees as low as 0.1%. Another downside for experienced traders is that CoinSmart doesn’t have an accessible API access. Margin trading isn’t supported, either.

On the other hand, CoinSmart’s built-in tax calculator is convenient and its relationship with Luminus Financial is a big plus. If CoinSmart lives up to its promise to provide reliable and fast withdrawals and deposits, that could be enough to motivate Canada’s advanced traders to make the switch.

Alex Munkachy

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