Liquid Review

Liquid.com Review: Promising Vision of Low Spreads, High Liquidity

Liquid in Brief

Liquid is a new exchange from Quoine, the first crypto exchange to get a license from Japanese regulators. It’s new brand and new look also comes with a new trading engine that promises to make Liquid the most… liquid… crypto exchange in the world.

Our Liquid review will help you understand what this new exchange is all about and whether you should test its waters.


  • Lists more than 80 cryptocurrencies and tokens.
  • Lists 5 fiat currencies.
  • First crypto exchange licensed by the Japan Financial Services Agency.
  • No-fee and low-fee trading.
  • Supports lending and leveraged trading.
  • Promises lower spreads and more efficient trading through higher liquidity.


  • Only launched in September, promises must be proven.
  • US residents cannot deposit or withdraw fiat.
  • Japan residents cannot access all features.
  • Japanese regulations are a moving target.

What is Liquid?


Japan’s Liquid is a new cryptocurrency exchange built on a long-established track record. Although Liquid only went live in early September 2018, Liquid’s parent company Quoine, has been in the crypto game since 2014. Quoine now has more than 300 employees worldwide and hosted more than $50 billion in crypto trading between September 2017 and September 2018.

Shortly after getting its start in 2014, Quoine launched its first crypto exchange, Quoinex. The exchange supported fiat-to-crypto trading as well as leveraged trading. In order to support customers globally, Quoine launched a crypto-only exchange called Qryptos in 2017

Licensed in Japan

In response to Mt. Gox and other crypto exchange meltdowns, Japanese regulators decided that protecting investors required a more hands-on approach. The tighter scrutiny on crypto exchanges’ sloppy business practices began in early 2017, forcing several exchanges like Kraken to leave the country.

Unlike the foreign crypto firms that fled Japan, Quoine stayed put and worked with regulators. The company hired all of the Big Four accounting firms to help develop the internal processes and procedures needed to earn the trust of Japan;s Financial Services Agency (FSA).

At the end of September 2017, Quoine announced that the FSA had licensed Quoinex. This made it the first crypto exchange to pass muster in Japan.

“Protection of customers’ assets is of the highest priority to us,” Kayamori said in the announcement. “With our [FSA] license, this is a positive market signal that we are here to build a trusted exchange….”

A new mission: fix crypto liquidity

In October 2017, Quoine announced that it planned to launch the first initial coin offering (ICO) by a regulated crypto exchange. Driving this decision was a desire by Quoine’s leadership to address the cryptocurrency industry’s liquidity problem.

“There are over 1000 crypto tokens in the world,” Kayamori explained on Quoine’s Telegram group, “and it will double within the next year. Almost all tokens (excluding BTC/ETH) are illiquid.”

Half of the $150 million Kayamori planned to raise would be used to turn Quoine into a market maker and inject liquidity into the moribund token market. The other half would go to developing a platform to inject even more liquidity into the cryptocurrency market.

The newly announced Liquid platform, Kayamori explained, “aggregates all major exchanges in the world to one single trading platform.”

QASH Initial Coin Offering

On November 6, 2017, the offering went live and came to a close 2 days later. The oversubscribed offering distributed 350 million qash tokens, raising the equivalent of 350,000 ether or $105 million.

Liquid credited the success to three factors. First, Quoine’s experienced leadership gave investors confidence that the team could deliver on its promises. The second factor was Quione receiving the blessings of the FSA. This indicated to investors that the company is not as exposed to regulatory risks as other crypto exchanges. Finally, the Liquid project promises an achievable solution to the real-world problem of crypto liquidity.

Kayamori thanked the backers of Liquid project and laid out the next milestones his team must achieve:

“We have a clear fiduciary responsibility now to our token holders… we have to deliver our product as promised… we have to provide liquidity by making sure… that there will be price stability, and there is an upward appreciation to all token holders.”

Merging into Liquid

The transition from Qryptos and Quoinex to Liquid began in early September. For 24 hours, the company froze all account balances, closed all open orders and suspended trading on the old exchanges in order to migrate the accounts to the new Liquid exchange.

The company plans to merge its exchanges and unify their utility tokens under the Liquid brand. In the short term, this simply means changing a setting in the QASH ERC-20 smart contract. Once the Liquid Distributed Ledger (LDL) is ready to go live, Liquid will conduct a token swap to replace the Ethereum-based QASH tokens with the new LDL-based Liquid tokens.

Leadership and investors

Liquid's leadership team
Source: Liquid
  • Mike Kayamori, co-founder and chief executive officer: Kayamori worked at technology firms in the United States and Asia. Much of that time was spent at SoftBank and its various subsidiaries.
  • Mario Gomez Lozada, co-founder, president and chief of product: Lozada has been developing financial software systems in Japan since the mid-1990s where he led technology groups at Merrill Lynch and Credit Suisse.
  • Ray Hennessey, chief technology officer: Hennessey led IT departments at a series of marquee financial firms across the US and Asia. Before joining Quoine, Hennessey was the president of KPMG Consulting’s operations in the Philippines.
  • Katsuya Konno, chief financial officer: Konno rose through the ranks at Japan’s technology giant SoftBank before Kayamori recruited him to Quoine in 2016.
  • Andre Pemmelaar, chief trading officer: Pemmelaar has held a number of trading and analyst positions before joining Quoine.
  • Rei Tanaka, chief risk and compliance officer: Tanaka has more than 25 years of experience in the banking industry. He ended an 11-year career at financial consultancy PwC to join Quoine earlier this year.
  • Michael Mullins, chief information security officer: Mullins has spent more than a dozen years in the field of information security and cybersecurity. He was the director of security for Prudential Corporation’s operations in Asia and currently serves as a contractor to the United States Department of Energy.


Angel and Series A investment rounds, raising $18 million, preceded the QASH ICO. JAFCO Asia was the lead investor.

Protecting customers’ coins

Legal and regulatory compliance

Even though Quione successfully navigated the FSA’s licensing process, the FSA itself is still refining its regulatory approach. In June 2018, the FSA issued Quoine a business improvement order.

Kayamori explained that the business improvement order centered “more around governance, compliance, back-office, KYC and AML” than on any suspicions of corruption or theft. In order to address the FSA’s concerns, however, Quoine had to pull developers off of the Liquid project, resulting in a 3-month delay in its launch.

Coin listing policies

A token issuer must provide extensive background documentation before Liquid will consider listing the token. First, the team must complete the verification process for a corporate account (see below). Beyond that, the token issuer must provide:

  • Mission and technology: The project’s white paper, link to the source code on a repository like GitHub, the ERC-20 token’s contract address, a detailed roadmap as well as a target date for the minimum viable product,
  • People: A list of the business and technology development teams, as well as a description of the specific roles any outside advisors play.
  • Community: Links to the project’s social media accounts and description of each community’s size.
  • Financial: List of all key investors and venture capital funds invested in the project, the portion of funds being raised in the private sale, the total funds being raised overall and a budget for how those funds will be used.
  • 3rd Party Assessments: A report from a known and established firm that audits the token’s smart contract, as well as a legal opinion “from a credible law firm” that the token is not a security.

The information will go to Quoine’s Token Listing Review Committee headed by Rei Tanaka and advised by several VC and crypto advisory firms.

Network security

Quione introduced new security enhancements to its exchanges in 2018. Called “Iron Shield”, the new policies broadened the use of 2-Factor Authentication (2FA) and introduced cooling-off periods to prevent phishing attacks.

All new users must activate 2FA before they complete the registration process. Liquid does not use the relatively insecure SMS-based authentication. Instead, you must use apps like Google Authenticator or Microsoft Authenticator.

Quoine imposes a cooling-off period any time 2FA is deactivated or a password is changed. Users will not be allowed to change their email address for a full week. Once the cooling-off period expires, users must submit an ID selfie along with the address change request to the exchange’s support team.

Customer support

Support site forLiquid
Source: Liquid

Liquid’s knowledge base is very well documented. The company clearly explains its features and provides step-by-step walkthroughs to make things easier for novices to get up to speed. For specific assistance, users can use the ticket-based support system.

Liquid reputation

Liquid is a new exchange, so hasn’t developed its own reputation. Since Quoinex and Qryptos have been around for a while, however, Liquid gets to start with the goodwill Quoine developed among the crypto community over the past four years. With substantial followers on Twitter, Telegram, Reddit and other social media sites, Liquid starts with a community that other companies must build from scratch.

For example, days after the transition from Quoinex/Qryptos to Liquid, the company’s subreddit moderator started a feedback thread. Instead of getting bombarded with snarky comments and screams of “scam”, what followed was a series of reasonable feature requests and suggestions for improvement.

How to Join Liquid

Who can join?

Liquid is available nearly worldwide, but with limits. Residents of the United States can trade on the exchange, but they cannot deposit or withdraw fiat. Residents of Japan can only trade those currency pairs that the Japan Financial Services Agency has approved.

At the moment, residents of 16 countries on the Financial Action Task Force’s list of high-risk nations cannot join Liquid.


Individual accounts

As is the case with most exchanges, Liquid requires identity verification from its users before the exchange will grant full access to its services. To begin verification, users must provide a scan of a government-issued photo ID, a scan of a proof of residency and a verification selfie.

Liquid’s verification process has 5 status levels for the exchange’s users. Once new users submit their verification documents, their status changes from Pending to Pending Verification. Should something go wrong in the verification process, the customer’s status will be Declined until they provide new documents.

Prior to getting their verification approved, users may deposit cryptocurrency and trade on the exchange but cannot withdraw crypto or move fiat into and out of their accounts.

Approved accounts can deposit and withdraw fiat (except in the United States) and withdraw cryptocurrency.

Any users who violate Liquid’s terms of service can be set to Banned and will lose access to all features other than the ability to log into and out of their accounts.

Business accounts

Liquid requires corporate verification before it will give businesses full access to the exchange’s features. Owners of corporate accounts must provide the following documentation:

  • The business’ certificate of incorporation, proof of its address, and the memorandum and articles of association.
  • Shareholder information, including their ownership share of the company, as well as a copy of the passports and proofs of address for any shareholders who own more than 25% of the company.
  • Copies of the passports and proofs of address of at least 2 directors, plus a copy of the board of directors resolution authorizing the company’s account with Quoine and naming the person or people managing the company’s Quoine account.
  • Copies of the passports and proofs of address of any company employees who manage the company’s Quoine account.

What Can You Trade on Liquid?

Liquid Markets
Source: Liquid


Liquid supports trading in 84 cryptocurrencies and tokens.

Fiat currencies

Liquid allows trading in Australian dollars, euros, Japanese yen, Singaporean dollars and US dollars.

Currency exchanges

Most of the cryptocurrency trading happens in the bitcoin base market which has 84 trading pairs. The ether base market has 75 trading pairs, the qash base market has 71 trading pairs and the Japanese yen market has 10 pairs. Other crypto-to-fiat trading pairs provide a limited set of trading opportunities for the remaining supported fiat currencies.

Advanced trading

While Liquid lets traders place quick market orders, traders can manage their investments better by entering limit orders, stop orders, and trailing-stop orders.

Lending and margin trading

From the lending section of the Liquid interface, users who want to issue loans can create offers in one of the supported currencies. Liquid provides indicators for minimum rate, average rate and maximum rate to help lenders decide on an interest rate to bid.

Margin traders can find open loan offers by going to the Market Offers section. When a trader enters an amount to borrow, that amount is taken from the offers with the lowest interest rates first.

ICO Marketplace

Marketplace for ICOs on Liquid
Source: Liquid

Continuing a practice established with its earlier exchanges, Quione will support new ICO projects and let its customers get access to the new tokens. Once an ICO passes the Token Listing Review Committee, it gets listed in Liquid’s ICO marketplace. Here, Liquid users will find information about the project and the team as well as copies of the effort’s white paper.

Trading Tools and Fees

Trading interface

Liquid Trading Interface
Source: Liquid

Liquid uses an interface similar to other advanced cryptocurrency exchanges. A price chart for the given trading pair lets users analyze trends to time their trades.

Liquid trading trends chart
Source: Liquid

A single order form lets users enter market orders or the more advanced order types like stop limit orders.

Liquid Market and Limit Order Form
Source: Liquid

Margin traders get a separate section dedicated to managing their leveraged trades.

Liquid Margin Trading Order Form
Source: Liquid

The lending section of the interface lets users see what competitive interest rates look like.

Liquid lending offers for bitcoin
Source: Liquid

And in the ICO marketplace, users can review all the information Liquid has gathered about upcoming token offerings.

Information on the ICOs listed on Liquid
Source: Liquid

Liquid World Book

The benefits of Liquid’s platform lie behind the scenes where the World Book trading platform enhances liquidity by linking multiple exchanges and facilitates cross-currency trading. As explained in the Liquid blog, if one user wants to sell bitcoin for Japanese yen and another user wants to buy bitcoin using Singapore dollars, the World Book transparently conducts a foreign exchange between yens and dollars.

The first user gets yen and the second user gets bitcoin without realizing any other currencies were involved. In other cases, as the Liquid white paper explains, none of the currencies involved in the trade may match. Liquid’s trading platform can use exchange rates to match someone selling ether for euros with someone buying bitcoin with Japanese yen.

Mobile app support

Liquid does not have a mobile app at this time.

Deposits and withdrawals

Fiat currencies

While Liquid does not charge fees on fiat deposits, the exchange does pass any charges from banks and payment processors to its users.

In addition to charges from payment processors, Liquid adds a fee to all fiat withdrawals. The fee amounts to 5 units of your home currency, except in Japan where the fee is between 500-716 yen.

Digital currencies

Liquid does not charge for crypto deposits or withdrawals.

Transaction fees

Trading on Liquid is almost free of fees. You just need to pay attention to which trading pairs you’re buying or selling. Liquid does not charge for trades of crypto/fiat pairs. Crypto/crypto trades are fee-free as long as the trades pair bitcoin or ether with bitcoin cash, dash, neo, quantum and ripple [UBTC, RKT, QASH].

All other crypto/crypto trades have a maker/taker fee structure. Market makers receive a 0.075% rebate. Market takers must pay a 0.15% fee, but can get that reduced to 0.075% when they pay the fees with qash.

Liquid charges a 0.05% fee on all margin trades, regardless of the trading pair. Liquid also charges an “interest payment fee” on all interest payments margin traders make to lenders. The fee is 50% of the interest payment and is paid by the lender.

Final Word

Liquid has made some grand promises. Only time can tell whether the exchange will fulfill those promises. The reality today is that Liquid builds upon Quoine’s four-year history of crypto trading. That means you can be fairly confident that execution and trading volume on Liquid will go better than at other freshly-minted crypto exchanges.

For new traders

With no-fee or low-fee trading and a thoroughly-documented support system, Liquid makes it easy for people new to crypto trading get up and running easily.

For advanced traders

Lending and leveraged trading make Liquid an attractive place for advanced traders to do business. If Liquid can deliver on its liquidity promises, then the exchange will be a go-to place for a growing number of traders.

Christopher Casper

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