Have you ever pondered on how secure Cex is for buying and selling cryptocurrency? Throughout this Cex review I will examine everything that you need to know. From being the leading bitcoin mining pool, to becoming the most beginner-friendly cryptocurrency exchange – Cex has quite the gift for continually adapting its core business practices to better suit the market. Many readers have asked me just how did such a small-time platform attract so many waves of new users, and come to rival some of the largest players in the industry.
Cex.io launched in early 2013 in the UK as a holding entity for GHash.io, one of the largest bitcoin mining pools. Ghash grew to control about 42% of bitcoin hashing power. The company was founded by Ukranians – Oleksandr Lutskevych and Oleksandr Ushchapovskiy.
The exchange feature was added to help users sell and buy shares of the mining pool using bitcoin. Through its cloud mining services, the exchange made it easier and more convenient for users to enter and leave mining operations. There was no need to purchase mining hardware when joining, or to dispose of it when exiting.
By September 2014, Cex’s user-base had reached over 200,000. The exchange started accepting deposits in US dollars, euros and Russian rubles through wire transfers, credit cards and SEPA from users around the world who wanted to buy bitcoins or GHash mining shares.
After the August 1st Bitcoin hard fork that saw the creation of Bitcoin Cash (BCH), the exchange announced they had enabled selling and buying of the new cryptocurrency on their platform.
Before proceeding to the core of my Cex inspection I would like to remind readers that the company ceased all cloud mining operations in January 2016. Supposedly this was to better focus on their services as a cryptocurrency exchange and trading platform.
Strengths of CEX
- Cex has one of the best ranges of available features while guaranteeing an outstanding beginner-friendly experience. The site is surprisingly easy to use – yet offers a many services, trading pairs, security features, and deposit methods.
- Supports deposits made with credit cards from a majority of countries. When compared to Coinbase, Cex accepts credit cards from significantly more countries.
- Offers margin trading on BTC/USD, BTC/EUR, ETH/BTC and ETH/USD pairs with good loss-protection tools. Cex competitors such as Bitstamp or Coinbase have no margin trading.
- Executes orders through fill-or-kill (FOK), making transactions faster and easier for beginners. Even advanced trading platforms like Kraken do not yet offer FOK orders to their users.
- Includes a mobile application. The android app has received 100 thousand downloads from GooglePlay.
- Offers an API for 3rd party developers to build customized tools. Most of the leading crypto exchanges are now seeing the additional revenue advantages of opening and API to 3rd party developers.
- Simple sign-up via social media accounts: users can register using their Facebook, GoogleID, VK, and Github logins.
- New trending altcoins are actively being added for trading. Most recently we have seen the addition of Zcash and Dash, two increasingly popular privacy-focused cryptocurrencies.
- Using the affiliate buy/sell page you can easily get recent conversion rates. For example you’ll quickly be able to see how much bitcoin you get for 100, 200, 500, or 1000 usd. I like the transparency offered by CEX – especially compared to other exchanges where you only see the rates after you have signed up.
- No known security breaches of customer funds to date. Cex has fared well while other large exchanges like Coinbase, Poloniex, Bitstamp, and Bitfinex have all experienced relatively severe thefts (though in most cases users were refunded).
Weaknesses of CEX
- Delays in card verification sometimes last weeks. Supposedly this was due to an influx of new users. We are indeed seeing reports of the delays clearing up progressively.
- Unresponsive customer support. Same as above, though the operators released a statement assuring the community that extra support staff were being recruited & trained.
- Currently supports only seven cryptocurrencies, a small number in comparison to other leading exchanges like Bitfinex or Bittrex. However this is slightly more than Coinbase and roughly the same as Bitstamp.
- Some countries are not supported with credit card and wire transfer payments. Alternatives such as Coinmama support more countries for Visa/Mastercard deposits. The Localbitcoins p2p exchnage will work in every country.
- Buggy mobile application offers only a few of the services accessible through the website. Justifiably the app only received a 3 out of 5 rating on the Play store.
- While the site does its very best to accommodate beginner bitcoiners. I feel that unfamiliar users are taken advantage of through slightly higher fees. Such is also the case on Coinbase and Coinmama. Sites like Kraken or Gdax are nowhere near as easy to use, yet offer the lowest fees to everyone.
User Experience on CEX
The user experience takes a core part of my Cex analysis. This is after all the main take-home opinion that users get during and after their usage. The company serves its users through a website, a mobile application and an API.
The website has a superior design when compared with other exchanges such as Coinmama or Bitfinex. Beginners are easy able to navigate from the sign-in page to the trading panel. An excellent security initiative was taken by the operators to automatically enable SMS & email two-factor authentication (2FA). Such 2FA is actually quite easy to do, yet keeps accounts safe for signing in and withdrawing.
Note that bitcoin security expert Andreas Antonopoulos remains skeptical as to the level of security provided by SMS 2FA.
The best types of 2FA are done using tools that only you control. A good alternative to SMS 2FA is Google’s Authenticator app – which users on Cex are now able to setup.
One feature that makes Cex stand out from other exchanges is that it uses the fill-or-kill (FOK) model to execute orders. This means that when you place an order, it is fulfilled immediately in its entirety. If the fulfilment cannot be achieved immediately, then it is cancelled.
Ordering BTC with a credit card on Cex.io
According the website analysis site Similarweb.com, the highest traffic to CEX.io (14.3%) comes from the US. Other countries that bring a high number of visitors include Russia (5.4%), Turkey (5.3%), United Kingdom (4.5%) and France (3.2%).
Similarweb.com also shows that about 30% of traffic comes through mobile devices.
The Cex mobile application is available for both Android and iOS. Through the app, you can deposit bitcoin, ether, and litecoin using a QR code. You can also place limit market orders within the app.
Users can view balances, active orders and changes in price. You can also initiate, manage and cancel orders as well as use real-time data from across different exchanges to analyse cryptocurrency markets.
Since the release of the app in December 2015, feedback from users has been both positive and negative. Some users have welcomed the app as a handy tool for keeping in touch with the market while on the go. I believe that such statements are indeed true, but more work could be made to expand the features of the app.
Others have expressed disappointment over poor user experience. Common complaints includes the app failing to execute orders, not displaying detailed graphs and making it difficult to login in.
It also only offers a fraction of the services accessible through the website. For instance, you can’t do margin trading through the app.
In addition to the mobile application, the team have made an application programming interface (API) available for developers to create customized applications for trading and managing funds. The API comes in three types: Rest for accessing market data, WebSocket for professional traders and Fix for institutional traders.
The trading API is limited to 600 requests per 10 minute interval. To increase this capacity developers will need to contact customer support.
According to Bitcoinity.org, CEX.io controls 0.78% of the global exchange market. It is ranked 15th in the list of crypto exchanges in terms of trade volume.
CEX.io ranks lower in terms of traffic than most major exchanges such as Coinbase, Kraken, Bitstamp and Poloniex. It outranks almost all of them in the amount of traffic from Russia, however. Aside from Yobit and Livecoin, few other major global crypto exchanges have Russia even in the top five countries in terms of traffic to their platforms.
The social media team are very active and responsive on Twitter, Reddit, and their blog. Do reach out to them if needed. There are some very interesting articles that I would encourage everyone to follow:
Aside from buying and selling cryptocurrencies, Cex has one of the best trading platforms. It supports margin trading for cryptocurrencies with 1:2 and 1:3 leverages. Features such as the automatic funds borrowing and negative balance protection make margin trading relatively accessible to beginners.
Signing up on CEX
You can register on Cex using a Facebook, Google, VK, or Github account. The process takes less than a minute. However, before you can use your credit card to purchase cryptocurrencies, you need to submit it for verification.
To verify your card, you will fill out a form that requires you to provide the name on the card, the card number and the expiration date. In addition, the exchange requires you to upload three color photos proving ownership of the card.
The first photo you provide is a selfie of you holding the card with its information clearly visible. The second photo is a selfie of you holding both the credit card and a government-issued ID. Information on both documents should be readable. The third photo is a selfie of you with the back of the ID visible.
After submitting these photos and filling out the form, you will be prompted to confirm that the information you have provided is up to date and valid. You will also give permission for a company compliance officer to view the information.
If everything meets the exchange’s requirements, you will receive an email notification alerting you on the readiness of your card for use on the exchange. If any part of the information you provide is not correct, the compliance officer will reach out to you for clarifications.
The verification process can take a few hours or up to a day. Some users, however, have reported waiting for longer than a day.
There are three types of fees on Cex: transaction fees, deposit/withdrawal fees, and margin trading fees. Cex charges users higher fees than most other exchanges.
All transaction fees are paid by the buyer (a trader who responds to an offer). The trader (or seller) who puts up an offer on the platform does not incur transaction fees. The fees are a commission of the value involved and they range from 0.10% and 0.20%. The higher the volume involved, the lower the fee percentage.
Deposit and withdrawal fees
Two factors determine the amount of fees you pay to deposit or withdraw from Cex. The first is the currency involved. The second is the payment method you choose to use.
Depositing through bank transfer and cryptos is free. However, withdrawing using these two payment methods costs between $30 and $50 for bank transfer—depending on the fiat currency—and between 0% and 1% for cryptos. I am ok with paying a small percentage for cryptocurrency withdrawing, but in my opinion the 10€ SEPA withdraw fee is slightly excessive – given that Kraken only charge 0.09€ for the same operation.
Deposits made through Visa and MasterCard cost between 3.5% and 5% of the value involved. You also pay a further flat fee of $0.20 to $0.25, depending on the fiat currency. Withdrawals cost 1.2% of the value involved and a flat fee of $3.80.
After enabling the trading of Bitcoin Cash (BCH), the operators announced that deposits of BCH are free, but withdrawals cost 0.01 BCH.
Margin trading fees
Cex charges 0.2% to open a position with a leverage of 2 or 3, along with a rollover cost of 0.1%. The platform charges no fees for closing positions.
You can access and use the services of Cex from anywhere around the world. However, the availability of payment methods it accepts from your country of residence can limit the services you receive. The use of credit cards to deposit fiat currency is unavailable to residents of the following countries:
- Saudi Arabia
If you reside in the following countries, depositing through bank transfer is also unavailable:
- Democratic Republic of the Congo
- Côte d’Ivoire
- São Tomé and Príncipe
While the exchange is registered in the US as a money service business, it is unavailable in over half of its states due to restrictive regulatory requirements.
Certain sites also offer similar beginner-friendly features. Here are the best alternatives to Cex.io:
- Coinbase – also a popular & beginner’s exchange. Use this Coinbase analysis for a good overview. Credit card & bank transfer deposits. (USA)
- Bitstamp – unlike Cex, Bitstamp has both a for beginner users & and one for advanced users. My Bitstamp inspection explains it all. Card & bank transfer purchases. (Luxembourg)
- Blockchain.info – most popular online wallet. Different to Cex in that users can only buy BTC (no selling). Visa/Mastercard for EU customers. (UK)
- Coinmama – similar to Blockchain.info – only for buying BTC or ETH. Read the pros & cons of Coinmama first. Credit card & cash via Western Union. (Israel)