QuadrigaCX vs Coinsquare at a Glance
QuadrigaCX and Coinsquare– the two largest cryptocurrency exchanges dedicated to Canadian crypto enthusiasts– offer very similar services. Both exchanges offer a limited listing of cryptocurrencies. Likewise, both exchanges only offer market and limit trades. With the exception of Americans, QuadrigaCX does accept customers outside Canada. Coinsquare begin its expansion into the United States and the United Kingdom until late in 2018.
Which one is better for you? Does that answer change depending on whether you live in Canada or in another country? Our comparison of QuadrigaCX vs Coinsquare will help you make the call.
Where Did They Come From?
QuadrigaCX has had a long, troubled history since its founding in Vancouver, British Columbia, back in December 2013.
As with many crypto startups, QuadrigaCX’s co-founder and current CEO, Gerald Cotten, felt that the existing exchanges were too difficult to use — and too difficult for Canadians in particular to access.
Within two months, Japan’s Mt Gox exchange collapsed leaving the largest exchanges in Central Europe and Russia. “People like the fact we’re located in Canada and know where their money is going,” Cotten said in an article QuadrigaCX placed onto CNBC through Globe Newswire.
Two years later in 2015, the Canadian exchange CAVIRTEX suddenly shut down amid security issues and challenges with banking regulations. QuadrigaCX swept up CAVIRTEX’s abandoned customers to become the largest cryptocurrency exchange in Canada.
Also in 2015, QuadrigaCX’s leadership began establishing a reputation for reliability and responsibility by registering with Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC). This is the agency that coordinates the country’s anti-money laundering operations.
At about the same time, however, things quickly began to go wrong for QuadrigaCX. The company’s executives tried to take a shortcut to getting listed on the Toronto Stock Exchange. Using a “reverse takeover” bypasses the rigors of an initial public offering (IPO), but it’s a technique often associated with boiler room pump-and-dump schemes.
In the end QuadrigaCX’s effort to take its shares public ended in disaster when incomplete audits led the British Columbia Securities Commission to ban the company from selling shares. Three members of the QuadrigaCX’s board of directors, as well as the company’s chief financial officer, resigned in the wake of the ban.
In 2017, yet another scandal broke as a software glitch wiped out more than 67,000 ETH from QuadrigaCX’s hot wallet. The exchange absorbed the losses, equivalent to US$14 million at the time, rather than passing them on to its customers.
Québécois mathematics professor Virgile Rostand left academia to found crypto exchange Coinsquare in 2015. At first running the exchange as a one-man operation, Rostand soon realized that Coinsquare was getting too big to handle on his own.
Now based out of Canada’s financial center in Toronto, Ontario, Coinsquare has added an experienced executive team and $30 million in venture capital investments. Coinsquare is positioning itself to become the dominant crypto exchange in Canada and beyond. A key element in its growth will be a planned listing on the Toronto Stock Exchange.
In an interview with Bloomberg, CEO Cole Diamond distinguished Coinsquare’s plans from QuadrigaCX’s failed attempt. “We’re going to take the old-school route as an IPO to the Toronto Stock Exchange,” Diamond said. “We believe that there are a tremendous amount of low-quality deals going public,” Diamond said in reference to the backdoor reverse-takeover approach QuadrigaCX attempted.
The IPO is expected to raise C$150 million (US$120 million) which will finance Coinsquare’s expansion into the United States and the United Kingdom.
Supported Currencies and Listing Policies
QuadrigaCX promotes itself as a Bitcoin trading platform. As a result of that focus, its range of currencies is very limited. Bitcoin, Bitcoin Cash, Bitcoin Gold, Ether and Litecoin are the only cryptocurrencies QuadrigaCX supports. The only fiat pairings are with the Canadian and US dollars.
Although Coinsquare promotes itself as “Canada’s home for digital currencies”, the exchange doesn’t support many more cryptocurrencies. Bitcoin, Bitcoin Cash, Dash, Dogecoin, Ether and Litecoin are the only coins you can trade.
Rumors began to swirl through the crypto world in late 2017 that Coinsquare would add Ripple’s cryptocurrency, XRP to its listing. In a January 2018 interview with Business News Network, CEO Diamond confirmed that Coinsquare would add XRP as well as Monero and other cryptocurrencies, adding that Ripple “is first in line.”
Coinsquare also supports pairings with four fiat currencies: the British pound, Canadian dollar, the euro and the US dollar.
Given the similarities between the two exchanges, Coinsquare only comes out slightly ahead of QuadrigaCX thanks to the newcomer’s more varied listings.
Neither exchange describes its policies for listing new cryptocurrencies. In his Bloomberg interview, Diamond did explain some of Coinsquare’s thinking. The company is more interested in “those [currencies] that have their own blockchains, there’s no indication that you own a percentage of a company that it’s part of some in-app or in-game token. Those are the ones we’ve decided we’re going to support.”
Security and Hacks
Coinsquare actively promotes the fact that it has never been hacked. Thousands of daily audits, keeping 95% of its customers’ assets in cold wallets and heavily stress-tested systems help ensure the security of the funds Coinsquare holds.
Similarly, QuadrigaCX hasn’t experienced a major hacking event – but it has experienced an embarrassing loss of crypto. Last year’s system glitch was a self-inflicted wound rather than an external hack. Regardless of the source, the event lost more than 67,000 ETH or $14 million at mid-2017 exchange rates. The episode did erode confidence among crypto investors.
Availability and Identity Verification
QuadrigaCX beats Coinsquare when it comes to availability. Anyone in the world, except Americans, can set up a QuadrigaCX account and begin trading. Former executive Michael Patryn explained in the #BlockTalk podcast that “If you service US clients, regulators will follow you…. I believe that you have to limit where you offer these services.
Although Coinsquare has plans to expand beyond Canada, that won’t happen until late 2018. The exchange’s expansion will be funded by its planned IPO which will not launch until September. “We believe that we will be a strong competitor to Coinbase and other exchanges in the U.S. by the end of the year,” Diamond said in his interview with Bloomberg.
QuadrigaCX does not require identity verification but limits unverified customers to purely cryptocurrency-based transactions. Customers who want to deposit or withdraw fiat currencies, on the other hand, must go through the verification process.
A simple identity and address verification process lets QuadrigaCX’s customers use the full range of Interac Online fund transfer options. This is the method non-Canadians will use so long as their banks support Interac Online.
For Canadians, a question-and-answer process run by Equifax lets them use electronic fund transfers from their Canadian bank accounts. QuadrigaCX also gives Canadians the option to verify their identities by going to a local Canada Post retail outlet.
Coinsquare uses a near-instantaneous automated verification process. In rare instances when that process fails, a more manual process can take three business days to complete.
Trading, Fees and Apps
QuadrigaCX’s simple interface lets you purchase its listed cryptocurrencies with Canadian dollars or with Bitcoin. The “Dashboard” section of the web app lets users place quick, auto-filled market orders. For large trades where users want to set a specific price, QuadrigaCX provides limit order functionality in its Trade section.
Similarly, Coinsquare offers a Quick Trade option for simple, instantaneous exchanges.
Coinsquare also allows more advanced limit orders, but limits those transactions to trades involving Bitcoin. You cannot place limit orders between non-Bitcoin currencies. For example, if you fund your account with Canadian dollars and want to buy Ether, then you must trade dollars to Bitcoin and then Bitcoin to Ether.
Coinsquare edges out QuadrigaCX when it comes to the cost of doing business. Fees for funding and withdrawing fiat are similar, but Coinsquare’s trading fees are lower. Coinsquare does charge for cryptocurrency withdrawals, though, which could wipe out savings made on trades.
Quick Trades of Bitcoin incur a flat 0.2% commission on Coinsquare while other cryptocurrency Quick Trades cost 0.4%. For the more advanced limit orders, Coinsquare’s maker-taker fee schedule is a flat 0.1% for market makers and 0.2% for market takers.
Coinsquare charges a transaction fee for the withdrawal of any cryptocurrency. The amount varies by coin. Ether withdrawals cost 0.005 ETH while Dogecoin withdrawals cost 2 DOGE. Check Coinsquare’s help site for the full withdrawal fee schedule.
Funding a Coinsquare account with fiat currencies will also incur fees ranging from 2.5% for an Interac Online transaction to 10% for a credit card transaction. Coinsquare’s funding fee schedule has full details.
QuadrigaCX does not charge for adding or withdrawing cryptocurrencies, although mining fees will apply. Fiat transfers incur fees that vary based on the funding method. EFT withdrawals, for example, are free while funding with a Flexepin voucher costs 2.5%. Check out the full funding and withdrawal fee schedule for more details.
QuadrigaCX charges a 0.5% fee for any crypto-fiat exchanges and 0.2% for crypto-to-crypto trades.
Coinsquare takes this category since QuadrigaCX does not offer mobile apps. The Coinsquare apps for iOS and Android allow customers to manage their accounts, track markets and place Quick Trade orders. Advanced traders, however, cannot place limit orders through the app.
Coinsquare’s mobile users aren’t exactly thrilled with the experience. The ratings of 2.7 stars in the Google Play store and 3.3 stars in the Apple App Store are driven by buggy implementations and the lack of advanced features.
Customer Support and Community
The two exchanges offer the same customer support options, user-specific support through a ticketing system and general information through a knowledge base.
QuadrigaCX moderates a dedicated subreddit where it posts updates and responds to general questions. The Coinsquare subreddit, on the other hand, is user-run with little oversight by Coinsquare itself.
Although QuadrigaCX’s leadership tripped over its attempt to go public, the exchange works at complying with Canadian financial regulations. It was, for example, the first crypto exchange to register with FINTRAC. Coinsquare is also registered with FINTRAC and complies with all of the relevant regulations.
Under Canadian law, crypto exchanges are not banks and cannot accept deposits. QuadrigaCX does not go out of its way to explain the implications of that distinction, but does outline the basics in its terms of service.
Since it is not a bank, QuadrigaCX cannot accept “deposits”. Fiat transfers into a QuadrigaCX account are actually purchases of QuadrigaCX Bucks, a synthetic currency used to purchase cryptocurrencies.
Presumably, Coinsquare does something similar, but does not discuss it publicly.
Canadians will have a tough time choosing between QuadrigaCX and Coinsquare since the two exchanges are fairly evenly matched. Coinsquare offers a slightly more varied lineup of cryptocurrencies and lower trading fees. Its cryptocurrency withdrawal fees, however, may negate any advantage over QuadrigaCX.
Internationally, QuadrigaCX has a clear advantage since it supports crypto enthusiasts anywhere in the world except the United States. Coinsquare plans to support American and British traders, but that expansion may not arrive until 2019.