QuadrigaCX vs Gemini at a Glance
The Canadian exchange QuadrigaCX and the American exchange Gemini have a lot of similarities at first glance. Both offer a limited mix of high trading volume cryptocurrencies. Both target advanced but conservative traders with market and limit orders, but not leveraged trading.
Philosophically, however, the two exchanges are very different. QuadrigaCX treats regulation as a necessary evil, keeping it at arm’s length when it can. Gemini, on the other hand, embraces regulation as the only way to integrate cryptocurrency with the established financial system.
How similar really are these exchanges? And which one makes the most sense for you? Check out the rest of our QuadrigaCX vs Gemini comparison to find out.
Where Did They Come From?
QuadrigaCX, founded in 2013, was one of the original Canadian cryptocurrency exchanges. Gerald Cotten, then a director of the Vancouver-based Bitcoin Co-op and now QuadrigaCX’s CEO, understood how difficult it was for Canadians at the time to buy Bitcoin. QuadrigaCX was his solution.
Within months of the exchange’s first trade, the Mt Gox exchange was hacked so severely that it never recovered. Canadian Bitcoin investors were faced with the prospect of using exchanges in Russia and elsewhere that they did not trust.
Canadians flocked to QuadrigaCX instead. “People like the fact we’re located in Canada and know where their money is going,” Cotten explained in an article QuadrigaCX placed in the media.
In 2015, another collapsing exchange led to rapid growth at QuadrigaCX. CAVIRTEX was facing security issues of its own and had disagreements with its bank. Within weeks of CAVIRTEX shutting down, QuadrigaCX had acquired most of its customers and became Canada’s number one Bitcoin exchange.
Taking a turn for the worse
2015 was also the year when things took a turn for the worse for QuadrigaCX. The exchange’s executives made the poor decision to bypass the rigorous process of an initial public offering. Instead, they tried to use a “reverse takeover” of an already-listed shell company.
For reasons that remain unclear, the listing fell apart. When QuadrigaCX failed to submit the required audits, British Columbia regulators ordered the exchange to stop all attempts to sell shares.
Three board members and the company’s chief financial officer resigned as a result of the failed listing attempt.
QuadrigaCX’s customers may have forgiven a failure in financial “innovation”. What happened the next year in 2017, however, shook the faith of many of them. A software glitch erased more than 67,000 ether, the cryptocurrency for the Ethereum blockchain, from QuadrigaCX’s hot wallet. The exchange had to bear the full cost of its mistake — US$14 million at mid-2017 street prices.
Today, QuadrigaCX’s ranks lower than 100 on CoinMarketCap with a 24-hour trading volume of only US$2.3 million.
Gemini is a US-based digital exchange that defines itself as a “bridge between the old world of money and new world of money”. In order to reassure people new to cryptocurrencies, Gemini promotes its “security-first” mentality.
Internet entrepreneurs Cameron and Tyler Winklevoss announced the creation of Gemini in 2014. They stated that, from the outset, Gemini was meant to bring Bitcoin, and cryptocurrency in general, into the mainstream of the financial system.
In their announcement, the Winklevii explained they wanted to create “a fully regulated, fully compliant, New York-based bitcoin exchange for both individuals and institutions alike.” Realizing the promise of Bitcoin, they concluded, would not be possible “if we don’t build towards an ecosystem that is free of hacking, fraud and security breaches.”
Doing it right takes time
Gemini went live twenty months later. The extended startup process was due to the time it took for New York and US federal regulators to approve its various licenses.
“Gemini must look and feel as safe, secure, and compliant as any other top tier financial institution in the world,” Cameron Winklevoss wrote in the Gemini announcement. “In short, we take licensing and compliance very seriously and think that asking for permission, rather than forgiveness is the right approach in this case.”
By creating the exchange as the Gemini Trust Company LLC, a New York State licensed trust, Gemini positioned itself to serve Wall Street financial institutions as well as Main Street investors.
Gemini stumbled the following year when it added ether to its trading system. System glitches forced Gemini, briefly, to suspend all flows into and out of customers’ accounts.
Today, Gemini ranks around 30 on CoinMarketCap with a 24-hour trading volume of about $47 million. By comparison, one of the top-ranked exchanges, OKEx, does more than $1.6 billion per day.
Supported Currencies and Listing Policies
QuadrigaCX and Gemini operate relatively simple exchanges. The Canadian exchange supports five cryptocurrencies: bitcoin, bitcoin cash, bitcoin gold, ether and litecoin,
QuadrigaCX lets you trade the coins with Canadian dollars or bitcoin. But you can’t, for example, trade litecoin with ether. There is also a market for bitcoin trades with the US dollar.
Gemini supports even fewer cryptocurrencies: bitcoin, ether, and z-cash. You can trade the three coins with the US dollar and with each other.
The policies the two exchanges apply to choosing coins to list is fairly opaque. Neither exchange formally documents their selection criteria.
Security and Hacks
The most severe compromise of QuadrigaCX’s systems was not a hack or a case of embezzlement. It was the previously mentioned loss of US$14 million in ether due to a software glitch. The extent of QuadrigaCX’s security documentation is a bullet list on the home page:
- Encrypted Cold Storage
- Two-Factor Authentication
- Collaborative Security with Cloudflare
- Collective Intelligent Threat Detection
- Global Load Balanced Network
Gemini, on the other hand, has an entire page dedicated to outlining its security policies. Among its features:
- Storing fiat funds in FDIC-insured banks.
- Storing crypto in proprietary cold storage.
- Cloud-based hot wallets secured with Amazon technology
- Multisignature, tiered access to hot and cold wallets.
Availability and Identity Verification
Gemini is available in Canada, Hong Kong, Singapore, South Korea and the United States.
Unlike most cryptocurrency exchanges Gemini operates in almost every state, district and territory in the US. Gemini is available in 48 states, the District of Columbia and Puerto Rico. The only states where Gemini can’t be used are Arizona and Hawaii.
QuadrigaCX is available worldwide with the exception of the United States and certain sanctioned countries. The executives at QuadrigaCX chose not to support the United States because of the intense scrutiny by American regulators.
QuadrigaCX has been around long enough to develop systems that process verification applications quickly. In fact, if you only want to trade cryptocurrencies, you don’t have to be verified at all.
International customers can go through a simple identity and address verification system. Once approved, they can use Interac Online to add or remove funds from their QuadrigaCX account.
QuadrigaCX’s Canadian customers can also go through Experian to prove their identity and address. Alternatively, they can go to their local Canada Post retail outlet and prove their identity in person.
Gemini, on the other hand, still uses manual processes to verify accounts. Delays had gotten so bad that the exchange was forced to warn potential customers that approvals can take a long time.
Trading, Fees and Apps
Although taking similar approaches to the market, Gemini’s trading system is more sophisticated with more advanced options for individuals and businesses placing high-volume trades.
Neither QuadrigaCX or Gemini offers the sophisticated trading tools of exchanges like Kraken. You can place market orders or exchange for the quick purchase or sale of the supported coins. You can also place limit orders to get better prices.
Gemini supports two advanced trading techniques: Block Trades and Auctions. Customers buying or selling in high volumes can place Block Trades to avoid having their orders influence the cryptocurrency’s price.
Auctions, also called “crosses” in the financial industry, set precise times when buyers and sellers can find each other. Transacting large-volume trades through Gemini’s Auctions can be cheaper and easier through the auction process than through market or limit orders.
Fiat and crypto deposits into a Gemini account are free as are fiat withdrawals. The first ten crypto withdrawals are also free. Once you pass that limit, any withdrawal of cryptocurrency will incur a charge.
Gemini structures its trading fee schedule on a maker-taker basis. Trading fees can be as high as 1% for low-volume traders. The fees decline to zero when high-volume traders place maker orders and 0.1% when placing taker orders. Block trades are free for market makers and cost 0.5% for market takers. Auction fees match the maker fees.
QuadrigaCX has a much simpler, though more expensive, approach to charging fees. Adding or withdrawing cryptocurrencies is free. Crypto-fiat trades cost 0.5% and crypto-crypto trades cost 0.2%.
Neither exchange offers mobile apps.
Customer Support and Community
Both exchanges deliver support exclusively through ticket-based systems. They also provide detailed knowledge bases as a self-directed support option.
QuadrigaCX does engage with customers on its self-moderated subreddit, but only to answer general questions.
Gemini is more upfront about it’s approach to working with regulators.
As a limited trust company, Gemini is registered with the New York State Department of Financial Services. That registration comes with obligations to meet capitalization, cybersecurity, money laundering and other requirements.
“The regulation is why we’re in New York, why we have a bank partner, and why we’ll have a real business when we launch,” Tyler Winklevoss told Fortune in a July 2015 interview before Gemini’s launch.
In the same Fortune interview, Cameron Winklevoss commented on the flight of exchanges from New York.
“Our view is a little different: it’s to be more mainstream and interact through the front door with regulators. Our approach is going to benefit everybody in bitcoin. An approach where you avoid New York might be more beneficial to you, but I don’t think it actually pushes the entire ocean of bitcoin up.”
Although exempt from registering with the US Department of Treasury’s Financial Crimes Enforcement Network, Gemini does file compliance reports with FINCEN.
For Americans, the decision when evaluating QuadrigaCX vs Gemini is easy. QuadrigaCX doesn’t serve the American market, but Gemini does. As long as your interest is in one of the three coins Gemini supports, Gemini is a good choice.
If you’re hesitant about the sketchier aspects of the cryptocurrency scene, Gemini is a nice place to get started. Its embrace of the traditional regulatory system means Gemini has similar security and oversight as a traditional Wall Street firm.
Since Gemini supports so few countries beyond the United States, it really isn’t an option for non-Americans. QuadrigaCX is the better choice by default.
Canadians, in particular, will find things to like about their homegrown crypto exchange. For example, QuadrigaCx’s relationship with Canada Post makes verification faster and more convenient.