CEX.IO: A Comprehensive Review

A London-based exchange started in 2013, CEX.IO allows users to buy, sell, and trade popular cryptocurrencies like Bitcoin and Ethereum.

(Image Source)

When the company first launched, it was both a cryptocurrency exchange and a cloud mining platform. That changed in 2016 when mining services were dropped. At that time, they added additional cryptocurrencies to their trading roster and focused exclusively on being an exchange.

Its major claim to fame is that it allows users to purchase cryptocurrency using a credit/debit card or a bank account. This is something a lot of exchanges shy away from, opting to take a safer crypto-to-crypto approach.

But does CEX.IO truly measure up to some of the other large fiat-to-crypto exchanges like Coinbase or Coinmama?

Let’s find out together!

How Does it Work?

CEX.IO is a very simple and user-friendly service. That makes it perfect for beginners who are just getting started in the world of crypto trading.

(Image Source)

The platform gives users the option of buying and selling directly from CEX.IO or trading one on one with other users.

Privacy- How Secure Is it?

CEX.IO utilizes two-factor authentication to secure their accounts. This requires an additional code to be entered after your password to gain access to the site. This is one of the most effective ways to ward off phishing attacks.

“With user passwords as a single-factor authentication, the only real protection against phishing is testing and training,” said Don D’Souza, one of the security managers for Fannie Mae in Washington DC.

(Image Source)

Users can access their login code using Google authenticator, by having CEX.IO send them a message via SMS texting, or by a phone call.

When it comes to privacy, CEX.IO is very private for users with a Basic account. This is their lowest tier and requires little more than an email and password.

The Basic account comes with limits and restrictions, which I will go into with more detail later. But, users who want to trade at a higher volume or with more payment options will have to go through an extensive verification process, which we will discuss later as well.

Pros

There’s a good amount of things that CEX.IO does right. For starters, its Fill or Kill order system works to protect transactions from an ever-changing market. It’s also great for both experienced and newbie traders alike, and it allows for cross-platform trading.

Fill or Kill

CEX.IO uses a trading technique called a Fill or Kill Order, or FOK, to ensure that users are not losing money on a deal due to the increasingly unstable nature of the crypto market.

A Fill or Kill order is, “an order to buy or sell a stock that must be executed immediately in its entirety; otherwise, the entire order will be cancelled,” according to the United States Securities and Exchange Commission.

(Image Source)

Using a FOK, CEX.IO will freeze pricing for 120 seconds when a user makes a purchase. They adjust the exchange rate to minimize risk. Once payment is made, the system checks your available funds and asks you to make the trade.

Once you authorize it, the trade only goes through if the condition of the market is at the level you agreed upon, or if the value has gone up. If the exchange rate has dropped, the trade is killed right then and there, preventing users from losing money.

Good for Beginners

CEX.IO is an excellent exchange for beginners. Their basic level account is very straightforward and only allows for trading via credit card. This is much easier for new traders, as fiat currencies are familiar and comfortable.

Crypto to crypto trades can be confusing, because the main currency being traded is not always as stable as, say, the US dollar or Euro.

Advanced Options for Expert Traders

That’s not to say that cryptocurrency experts will be bored on this platform. CEX.IO can function as an advanced trading tool, allowing for Margin Trading.

Margin trading is the practice of borrowing funds from a broker to trade with. This allows more experienced crypto professionals to engage in big money deals at a time where the market is right for it.

(Image Source)

“Margin refers to the amount of funds that the trader or investor must personally put up from his or her own resources, and can vary widely depending on the asset or instrument,” according to an article published on Investopedia. “For instance, currency futures typically need a margin that amounts to a low single-digit percentage of the currency contract’s value. A stock bought on margin generally requires the investor to supply 30% to 50% of the value of the purchase transaction. As a rule of thumb, the greater the volatility of the stock, the higher will be the margin requirement.”

Cross-Platform Trading

Another great aspect of this platform is accessibility. You can trade via your computer or mobile device.

(Image Source)

The CEX.IO mobile app is available on both iOS and Android devices. It allows users to place and cancel orders, monitor fluctuations in price, analyze data, and make deposits of Bitcoin and Litecoin.

Cons

There are also a number of problematic issues with CEX.IO. Most notable among them are some extreme identity verification practices and high fees.

Extreme Verification

If you want to engage in large-scale trading on this platform, you have to provide CEX.IO with a lot of personal information. This includes identifying data like your full name, address, and phone number, as well as the uploading of a number of personal documents.

This is because of the inherent volatility of trading with a credit card. Credit card transactions are reversible, and crypto transactions are not. Many traders were taking advantage of this by paying for Bitcoin with a credit card, receiving it, and then canceling the transaction.

On top of that, credit card companies are reluctant to back crypto transactions because of the volatile nature of the market.

“You’ve got people that are eschewing their mortgage to buy bitcoin to get rich quick,” Aite Group analyst Kristina Yee said to the LA Times, noting that the banks are “worried that people are over leveraging themselves and they won’t be able to pay back the debt.”

That’s why exchanges that traffic in credit card transactions take a lot of information from their users. This is great for those who want advanced security. But the majority of cryptocurrency traders prefer digital money because of the anonymity associated with it.

High Fees

CEX.IO charges some huge fees for credit card transactions, ranging from 3.5% up to a whopping 7% of the trade.

When you consider that most cryptocurrency exchanges charge under 1%, you begin to see the huge discrepancy. However, this is relatively common of exchanges that deal with credit and debit cards, due to the increased risk mentioned above.

Limited US Availability

Platforms that traffic in cryptocurrency to cryptocurrency trades are global, for the most part. But CEX.IO has some limitations when it comes to the availability of credit card payments and bank transfers.

On top of a list of countries that are barred from either card or bank-based transactions, there are a number of US states which cannot use the system.

Limits & Liquidity

There are limits placed on some of the lower tier accounts that users can sign up with on CEX.IO.

(Image Source)

The most limited is obviously the Basic Account. This beginner level, low verification account has a daily spending limit of $1,000 and a monthly limit of $3,000.

This is great for some of the newer traders, but advanced users will want to spend more than $3,000 per month.

All other account levels, including Verified, Verified Plus, and Corporate accounts are unlimited and have no daily or monthly cap. It should be noted, however, that to have one of these accounts you have to adhere to some invasive identity verification requirements.

How Fast Are the Transactions?

Credit card transactions tend to be instantaneous on CEX.IO, with very little to no lag time whatsoever.

“Fiat deposits via the payment card, are almost instant,” a representative of CEX.IO said on their official support page. “Though the exact processing time depends on your bank.”

(Image Source)

Wire transfer deposits can take longer, typically coming in somewhere between three and seven days. This makes credit card deposits a far more efficient form of payment, though it should be noted that increased fees do apply.

Following a trade, it generally takes one to two days for funds to become available.

Ease of Use

One of the reasons why CEX.IO is such an excellent platform for new traders is how easy it is to use.

New users first fill out a very simple form, which asks for an email address and password.

(Image Source)

Then, it will ask you to confirm your email address with a code that it sends to you.

(Image Source)

After you’ve confirmed your email address, it will ask you to confirm a phone number. This is for the purpose of two-factor authentication.

(Image Source)

It will then ask you for your alert preferences as it pertains to the aforementioned two-factor authentication.

(Image Source)

Once that’s done, you’re all set and ready to start trading. Keep in mind that this is how you sign up for a Basic account. More advanced accounts will require more identity verification.

Exchange Rates

CEX.IO has a larger than normal rate for all transactions. This is rather typical of exchanges that deal with credit card transactions.

To purchase directly from CEX.IO, or sell to them, there is a fee of 7%.

(Image Source)

 

Fees associated with deposits and withdrawals vary based on the method of payment you’re using.

Visa card deposits have a fee of up to 3.5%, and withdrawals cost up to $3.80.

MasterCard deposits also have a fee of up to 3.5%, but withdrawals come in at up to 1.2% plus an additional $3.80.

There is no fee whatsoever for withdrawals or deposits made using bank transfers. Crypto Capital deposits cost nothing, but withdrawals carry a fee of 1%.

(Image Source)

 

Trades between users vary based on their 30-day trading volume, as displayed in the above image. Users who are trading less than five BTC in a 30 day period are charged 0.25% for trade takers and 0.16% for trade makers.

The fees decrease based on spending habits, all the way to traders who exchange more than 6,000 BTC in one month. These big spenders are charged 0.10% for trade takers, whereas trade makers are charged nothing at all.

Reputation of the Exchange

Like most exchanges, CEX.IO has its fans and its detractors.

(Image Source)

This review is talking about the time that it takes to have accounts approved for use. As you can see, more than one person had this issue, but CEX.IO was quick to respond.

(Image Source)

The general consensus seems to be that people do not consider CEX.IO to be a scam, but there are issues with customer service and the use of cash.

What Payment Methods Can You Use?

CEX.IO accepts four fiat currencies as payment.

They take:

  • USD
  • EUR
  • GBP
  • RUB

Wallet Availability

CEX.IO makes use of an in-house wallet. They also state that they use cold storage to hold onto user funds.

Cold storage wallets exist offline and are typically more secure than online wallets. That’s because it is impossible for a hacker to crack into a wallet that is not connected to a network.

(Image Source)

Despite this added security, it is still recommended to keep all funds in your personal cryptocurrency wallet. You have more control over security that way. In the past, certain exchanges have been hacked, and cyber criminals made off with user funds.

Most recently, the decentralized exchange Bancor was hacked, losing over $12 million in Ethereum.

Bancor stated that no user funds were taken and that everything, “was stolen out of BNT’s connector balance (like a reserve). The rest of the stolen tokens were taken from smart contracts that the breached wallet had access to on the network.”

Identity Verification Requirements

Basic account holders need only enter an email address and a phone number to start trading. However, these accounts have limits, as detailed above.

Basic accounts can also only trade using credit cards. Bank transfers and the use of Crypto Capital are reserved for Verified, Verified Plus, and Corporate accounts.

First off, they want to see an identity document. This can be something like a drivers’ license, a passport, or a government-issued ID card.

(Image Source)

Personal information must then be entered on the site.

(Image Source)

They also want to see proof of residence. This can include a bank statement or a utility bill that is not a mobile phone or cable bill.

On top of that, they also ask you to upload a selfie holding your personal identification card.

(Image Source)

Countries Availability

CEX.IO is worldwide, with some notable exceptions. There are a number of countries that are banned from using their credit card or bank transfer functions.

The following countries CANNOT use CEX.IO for credit card transactions:

  • Iceland
  • Vietnam
  • Algeria
  • Afghanistan
  • Bahrain
  • Algeria
  • Kuwait
  • Iraq
  • Libya
  • Lebanon
  • Oman
  • Nigeria
  • Palestine
  • Qatar
  • Pakistan
  • Yemen
  • Saudi Arabia

The following countries CANNOT use CEX.IO’s bank transfer services:

  • Afghanistan
  • Cote d’Ivoirie
  • Republic of the Congo
  • Guinea-Bissau
  • Ethiopia
  • Iran
  • Haiti
  • Iraq
  • Liberia
  • Kenya
  • Libya
  • Sao Tome and Principe
  • Guinea
  • Sudan
  • Somalia
  • Tanzania
  • Syria
  • Turkey
  • Tunisia
  • Vietnam
  • Zimbabwe
  • Yemen

Certain states in the United States cannot use CEX.IO at all.

They are:

  • Alabama
  • Alaska
  • Arkansas
  • Colorado
  • Florida
  • Georgia
  • Idaho
  • Iowa
  • Kansas
  • Louisiana
  • Maryland
  • Michigan
  • Mississippi
  • Nebraska
  • New Hampshire
  • New Jersey
  • North Carolina
  • North Dakota
  • Ohio
  • Oregon
  • Tennessee
  • Texas
  • U.S. Virgin Islands
  • Vermont
  • Virginia
  • Washington

What Coins Can You Buy?

CEX.IO allows you to buy a decent amount of cryptocurrencies through their platform. When they first started in 2013, they only offered Bitcoin but began expanding in 2016 with Ethereum.

(Image Source)

The following currencies can be purchased with CEX.IO:

  • BTC
  • ETH
  • BCH
  • BTG
  • DASH
  • XRP
  • XLM
  • ZEC

In Conclusion

If you’re looking to purchase cryptocurrency using fiat from a credit card, CEX.IO is a straightforward and effective platform that can get you started.