A History of CEX.io
CEX.io initially started as a cloud mining provider in London in 2013. It owned the Bitcoin mining pool known as Ghash.ie but closed this pool in January 2015 and continued its operation as a cryptocurrency exchange.
It is definitely one of the better Bitcoin exchanges in terms of its reliability and speed, though it does not have a large range of cryptocurrencies to trade.
The company is registered as a money service business with FinCen in the USA and contains a PCI DSS certificate. This certificate is required for the processing of credit and debit card data.
Many cryptocurrencies, even big ones such as Bitcoin and Ethereum, can be difficult to buy via card. And many exchanges do not allow card purchases, only bank transfers, for a variety of reasons.
CEX.io is one of few Bitcoin exchanges that allow users to buy with cards, which is excellent from a convenience standpoint. Card purchases tend to be higher than bank transfers though they are much quicker. But card purchases from CEX.io tend to be lower when compared to other major exchanges, which is a huge bonus.
Credit card is the most popular type of payment method when it comes to CEX.io. Bitpanda, charges 5% for credit card fees, Coinmama charges 6% and its main competitor, Coinbase, charges 3.99%. CEX.io charges 3.5% + .25 EUR. The other two supported currencies are USD and RUB.
With CEX.io, you can buy and sell Bitcoins using a fiat currency via a verified Visa or MasterCard or bank transfer. This charge is 2.9% + EUR 4.99. Note that banks may charge conversion fees on your deposit. After verification CEX.io processes most credit card purchases instantly so you have your cryptocurrency immediately.
CEX.io supports all countries bar specific regions in the Middle East and Africa, countries that are typically red flagged for financial terrorism and for violating human rights such as Iraq, Afghanistan and Syria. But a lot of states in the USA are not supported.
This list includes Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Georgia, Guam, 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 and Washington.
CEX.io does not appear very USD friendly at present. As of January 28, 2018, it no longer allows USD withdrawals which will eliminate much of the American market. You can also get involved with Bitcoin trading on CEX.io, which is backed by their safety guarantee.
From a security perspective, CEX.io is up there with the best, possibly a little behind Coinbase and Kraken. Two Factor Authentication (2FA) is used via Google Authenticator, which is an additional security step if someone else is using your account.
If someone logs in from an unknown location or device you will be sent a confirmation for your security. This is now a prerequisite in cryptocurrency security. CEX.io applies Know Your Client (KYC) and Anti Money Laundering(AML) policies to all clients.
Unfortunately, stringent regulatory procedures and efficiency are polar opposites. In 2017 CEX.io was the victim of much negative feedback due to its lengthy verification times as well as transaction processing times.
The CEX.io customer service team indicated that this was because of an influx of new users as well the work required to satisfy new AML and KYC policies. For advanced verification, users are required to submit a picture of themselves holding a credit card as well as a picture holding a government ID.
Many people have adverse reactions to what can be perceived as a humiliating submission in order to simply trade cryptocurrency, and tend to go elsewhere. While the verification process is long, subsequent purchases can be very quick.
CEX.IO offers customer support via email at support@CEX.IO. While the team is not exactly fast, by the standards of cryptocurrency customer service standards it is quite good.
Slow customer response times is standard in the cryptocurrency industry due to the incredible levels of growth the past five years, and these teams have to constantly upskill to keep up in such a fast-paced industry.
Something to be aware of is that CEX operates a little differently from other platforms. It uses FOK (Fill or Kill) orders that are executed immediately.
This can be contrasted to other exchanges where if you buy two Ether tokens you need to wait until you can find someone who is willing to sell them to you. With FOK these orders are always fulfilled successfully. Meaning there are no liquidity issues.
Unfortunately, CEX is very expensive with all of its hidden charges. While officially the fees seem to be standard, the online world is rife with complains of hidden charges in the price of the exchange rate. Basically, CEX seems to take a 7% cut in terms of the market price of what you are buying or selling.
So, if you were buying with a credit card, you would be paying around 3.5% with an additional 7% on top. This is financial suicide for many seasoned investors and cryptocurrency is possibly the only industry where it could pay off.
Paying without credit card could save 3.5% and prevent costs from being prohibitive. An advantage of CEX is that it enables direct purchase of DASH and Zcash, which are hard to find.
There are also plenty of red flags in terms of the verification process, as extensive as it is. They force users to go through the humiliating picture but do not disclose the third party they use to process the information. They also require a 300 dpi resolution photo and it has to be perfect.
Overall this Bitcoin exchange is merely OK. On the plus side, it is very secure and is quite easy to use. Liquidity is not a problem due to its FOK system, and for many traders this could be a big enough reason to join the Bitcoin exchange.
The issue is of course the huge charges which are often not made clear to customers. They have a rounding error which means they take an extra (tiny) cut and they deduct .02% in transaction fees.
And these customers are quite angry, as CEX seem to be taking bits and pieces out of their clients at every step along the deposit, purchase and withdrawal stage. But they do seem to have improved in recent months and have been clearer about their fee structure.
The main issue with this platform is really the 7% premium which is too much. The verification process is also quite long and intensive. If you want a secure Bitcoin exchange and don’t want to take any chances, then CEX.io might be the way to go. It is the European equivalent of Coinbase but tends to be a lot more expensive and a little more liquid.