What is CEX.IO? (And Is It Available in Canada?)

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robertstevens

Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.

CEX.IO is a full-service, one-stop-shop crypto exchange based in the UK. It lets you buy, sell, borrow, lend, and hold cryptocurrency, and earn money on your crypto savings. For businesses, it also offers a “prime brokerage“ service, which cuts fees for high rollers.

In other words, it’s a crypto exchange. All of the big ones offer such services these days—and more. CEX.IO isn’t a particularly large exchange; it ranks at 43rd place on metrics site CoinGecko and 47th place on CoinMarketCap—sites that rank exchanges on a variety of metrics, including trust, volume and number of markets.

CEX.IO processed just $43 million worth of trades per day when we checked in July, 2021—peanuts compared to behemoths like Coinbase, which processed $1.7 billion worth of cryptocurrency trades in the same period, or Binance, the world’s largest cryptocurrency exchange, which processed $12.5 billion.

Nor does CEX.IO lead in terms of the number of markets offered. It lists 82 coins with 204 pairs, which is a great deal lower than, for instance, Huobi, which offers 330 coins and 909 pairs, or Binance, which offers 320 coins with 1150 pairs. But all exchanges are slightly different under the hood. In this guide, we’ll show exactly how CEX.IO differs from its competitors.

What is CEX.IO?

CEX.IO was registered in the UK in 2013. It started life as a trio of crypto services: a Bitcoin mining pool, which groups together computers to mine Bitcoin (a way of cracking computer puzzles to verify transactions on the network), cloud mining services (which rent power from, say, Amazon Web Services, to do the same thing), and an exchange to trade mining power. The first two were owned by mining pool giant GHash.IO, and the final one, the mining exchange, was called CEX.IO.

Since its launch, CEX.IO doubled down on the exchange business and turned itself into a regular Bitcoin exchange. In 2014, it let users deposit money with debit and credit cards. In 2015, it launched a mobile app, the following year added withdrawals to debit and credit cards. CEX.IO expanded outward shortly thereafter; in 2019, CEX.IO launched in the U.S., where it now has 31 money transmitter licenses, is registered with FinCEN, and operates in 48 states.

In 2020, CEX.IO started to offer more services, like staking, which lets you pledge cryptocurrency to earn interest in that currency, often by locking it up in a savings account for a while, and instant trading, which lets you buy and sell crypto in a couple of clicks.

The exchange is run by a Ukranian called Oleksandr Lutskevych, who co-founded a now-defunct videogame engine studio that produced a game called Steel Squall: The Blaze of Eastern Front, which never saw the light of day. As a crypto executive, he is also the director of CEX Markets, a Cypriot investment firm, CEX.IO Limited, a crypto company authorized by the Gibraltar Financial Services Commission to do crypto stuff, and Decent Finance, a crypto company registered with the U.K’s Financial Conduct Authority.

CEX.IO claims to have been one of the first crypto exchanges to offer fiat-to-crypto transactions—buying cryptocurrency with real money—but then again, since BItcoin was only created in 2008, this really means that it was one of the first genuine crypto exchanges. Eight years later and now CEX.IO is a group of companies; like lots of other crypto exchanges, it maintains subsidiaries that allow the group to operate in multiple jurisdictions. Combined, they now serve about 4 million customers.

It’s unclear why the exchange is called CEX.IO, which on the surface appears to be both a suggestive homophone and the name of a high-street videogame and DVD exchange store, but presumably it’s a reference to “centralized exchange.” These exchanges are run by companies, as opposed to _de_centralized exchanges, which are run by communities and operate on the blockchain. At the moment, centralized exchanges dominate the industry; decentralized exchanges are too slow and expensive, although that is beginning to change.

Is CEX.IO Available in Canada?

Yes, CEX.IO is available in Canada. Residents of the country can trade all of the popular cryptocurrencies, including Bitcoin, Ethereum, Dash, ZCash and XRP. The exchange also lets you buy crypto in fiat (normal money), including through the Canadian and US dollars, the euro and the pound.

How do you use CEX.IO?

You use CEX.IO just like any other crypto exchange. You load up your account with funds, whether that be money, like US or Canadian dollars, or cryptocurrencies, like Bitcoin or Ethereum. To do this, you can either deposit money from your bank account, send crypto from another wallet, or buy crypto directly with a credit or debit card.

CEX.IO charges for deposits and withdrawals through some methods. Deposits of U.S. dollars, euros, pounds and rubles cost 2.99% if you’re using VISA, Mastercard, or Skill. They’re free for bank transfers (apart from deposits of rubles), as well as other national payments networks, like ACH in the U.S., SEPA in the E.U. or Faster Payments in the U.K.

Withdrawals of fiat currencies also carry charges through most methods: a service charge of up to 3% plus a fee of $1.2 for U.S. dollar withdrawals to a VISA card and up to 1.8% and $1.2 for U.S. dollar withdrawals to a MasterCard. Pounds and euros withdrawals to VISA and MasterCards charge a little more and rubles charge a lot less (just 0.5% plus 20 rubles ($0.27 USD). Bank transfer withdrawals are expensive for small amounts: 0.3% + a flat fee of $25, €25 or £25, but national payments networks are free, apart from in Russia, where QIWI charges 2.49%.

Account funded and fees navigated, it’s time to trade. You’ll have to choose what kind of trade you want to execute on CEX.IO and how you’d like to buy your crypto. Different purchase methods and types of trades carry different fees.

Let’s assume that you’d like to spend $200 USD on Bitcoin, and that’s all you’re going to spend for the month. You have a number of options.

There’s a “fill-or-kill” order system on its site, which refreshes the price of the order every minute; if nobody buys that Bitcoin, then the deal goes off the table. CEX.IO charges 7% from this, plus it’s sold slightly at above market value for convenience. At the time of writing, one of these fill-or-kill orders for $200 would get you $183 of Bitcoin.

If you want closer to $200 worth of Bitcoin for your $200, you’ll get a much better deal on the standard orderbook site. The charts and whizzing numbers look daunting and complicated but it’s surprisingly simple once you understand how it works—although presumably even quantum physics is trivial after your third PhD.

You’ll want to place a ‘spot’ trade at the market rate, and you’ll pay a 0.25% fee for doing so. You’ll buy the next available trade and get $199.5 worth of Bitcoin for your $200, assuming that you wired the money through your bank or national payments network.

If you want an even better deal, then there’s always “limit“ trades, which let you place a bid for Bitcoin at your desired price. So, say you want to buy Bitcoin when the price drops by 5% cheaper, and you expect that will happen in the next 10 hours or so (not unlikely at all given the volatility of the cryptocurrency). You then place an order to buy Bitcoin at 5% less than its going rate, and CEX.IO’s matching engine will fulfill that trade if Bitcoin reaches that price. You’ll pay a lower fee of 0.16%, and you’ll receive $199.68 worth of discounted Bitcoin.

There’s one other major way of trading Bitcoin on CEX.IO: Margin trading, from 2x margin to up to 100x margin. This is incredibly risky; trading on 100x margin—i.e. with 100x the buying power of the Bitcoin you hold in your account—is one of the fastest ways to become a billionaire through Bitcoin with the money in your pocket but a very easy way to lose your money.

If Bitcoin goes up, you’ll make 100x the profits you would have if you traded without leverage. But you can also lose 100x (or, more likely, you’ll get liquidated and just lose all your money) if Bitcoin decreases by the equivalent amount. (You can also ‘short’ Bitcoin on margin to profit from losses and lose money if its price rises, if you believe that Bitcoin will crash soon.) You’ll also have to pay to maintain these highly risky financial positions. It’s for advanced or high-risk traders. If you’re new to crypto trading, consider simpler trades or using a demo account.

In summary, CEX.IO is a crypto exchange that, for the most part, does exactly the same as its contemporaries. Although its offering is similar to others, behind the hood these exchanges are all run by different teams, often unregulated or without insurance, and thus all prone to failure.

Last Updated August 2, 2021

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