CEX.IO is a solid cryptocurrency platform. But watch out for its high fees when buying and selling bitcoin.
If you’re looking into using bitcoin to send money to someone, you will need a cryptocurrency platform.
CEX.IO might be on your list of candidates — it’s a London-based exchange founded in 2013 that lets you buy, sell and trade cryptocurrencies. In a sea of competitors, CEX.IO’s claim to fame is that it allows withdrawals to credit cards.
The question, of course, is whether CEX.IO is a good choice for buying cryptocurrency. Let’s find out.
|Product Name||CEX.IO Cryptocurrency Exchange|
|Fiat Currencies||USD, EUR, RUB, GBP|
|Cryptocurrencies||BTC, BTG, BCH, LTC, DASH, ETH, XRP, ZEC, XLM, GUSD|
Bank transfer (SEPA)
Instant buy: 7%
VISA & Mastercard: 3.5% + $0.25 USD, 3.5% + £0.20 GBP, 3.5% + 3.5% + €0.24 EUR, 5% + ₽ 15.57 RUB
Bank transfer: None
Crypto Capital: None
- No commission for bank deposits and competitive fees for withdrawals
- Exchange rates typically within 0.5% to 2% of mid-market rate
- High maximum transfers with verified account
- Supports US dollars, euros and rubles only
- Bitcoin-based money transfers can be complicated
- High fees for buying and selling Bitcoin
- Bank withdrawals can be expensive
Risk disclosure: What you should know about CEX.IO
- CEX.IO offers leveraged investment product(s) that aren’t suitable for inexperienced traders. Before signing up, consider whether you understand how this type of trading works and if you can afford the high risk of losing your money.
- CEX.IO is regulated by FinCEN (USA).
How are CEX.IO’s exchange rates?
Exchange rates on CEX.IO are based on the platform’s market activity. Traders on CEX.IO buy and sell cryptocurrency; at the same time, the exchange rate will fluctuate.
Though the exchange rate can change, you’ll typically find that it’s within 0.5% to 2% of the mid-market rate.
What is the mid-market rate?
The mid-market rate is what your money’s actually worth on the global market compared to another currency. It’s the midpoint between worldwide supply and demand for that currency — and the rate banks and transfer services use when they trade among themselves.
Use the mid-market rate as a baseline to compare against the rates provided by your bank or transfer service. With it, you’ll discover which companies offer the best rates.
Overall, CEX.IO’s exchange rate is reasonable compared with other cryptocurrency exchanges. It’s more important to look at CEX.IO’s fees for buying and selling cryptocurrency, which can sometimes be high.
How much will I pay to send money with CEX.IO?
You first need to deposit fiat currency — government-issued money like GBP or EUR — onto CEX.IO. The exchange supports USD, EUR, GBP and RUB. Here is what you’ll pay in USD to buy bitcoin.
|Credit card||3.5% + $0.25|
|Bank transfer||No commission|
|Crypto Capital (for bitcoin)||No commission|
Next, you need to purchase bitcoin. Buying bitcoin comes with a 7% transaction fee for the instant buy feature and 0-0.25% for trading. If you choose to deposit a fiat currency that isn’t supported by CEX.io, keep in mind that your bank may charge you a currency conversion fee.
Sending the bitcoin to your recipient
To send cryptocurrency to someone, you transfer cryptocurrency to your recipient’s wallet.
Selling the bitcoin
When your recipient sells the bitcoin, they’ll be charged a 7% transaction fee for the instant buy feature and 0-0.25% for trading. If they make withdrawals through fiat currencies not supported by CEX.io, they could be charged currency conversion fees by their bank or payment platform of choice.
Withdrawing the fiat currency
Now that your recipient has sold the bitcoin for fiat currency, they need to get the money from CEX.IO.
Here are the fees for fiat currency withdrawals.
|Mastercard||1.2% + US$3.80|
How do I send money through CEX.IO?
A bitcoin-based money transfer involves a series of steps.
- You use fiat currency to buy cryptocurrency
- You send cryptocurrency to your recipient’s wallet address.
- Your recipient sells cryptocurrency for fiat currency.
- Your recipient withdraws the fiat currency to their bank account or credit card.
Here’s a hypothetical money transfer through CEX.IO for sending US$1,000 to someone in Germany. According to the mid-market rate at the time of this writing, US$1,000 is worth about 0.78 BTC.
US$1,000 to Germany
Step Result Deposit US$1,000 onto CEX.IO via bank transfer US$1,000 in funds on CEX.IO Buy US$1,000 in bitcoin Receive 0.72 BTC Send the bitcoin to your recipient via voucher No fee; your recipient receives 0.72 BTC Your recipient sells the bitcoin for euros Your recipient receives 810 euros Your recipient withdraws the euros from CEX.IO to a Visa credit card Your recipient pays approximately 4 euros in withdrawal fees, ending up with 806 euros
According to the mid-market rate at the time of this writing, US$1,000 is worth about 0.78 BTC.
Case study analysis
- In the case study, your US$1,000 buys you 0.72 BTC. That means you lose 0.06 BTC — about US$76 — from the purchase. Most of the loss comes from CEX.IO’s 7% transaction fee through the instant buy section.
- According to the mid-market rate, 0.72 BTC is worth about 868 euros. But when your recipient sells the bitcoin, they receive 810 euros. Again, most of the loss comes from the transaction fee.
- After all is said and done, your recipient is left with 806 euros, which is about US$853. Throughout the complete money transfer, you’ve lost almost US$150.
Minimum transfer amounts and available countries
When buying cryptocurrency on CEX.IO, you need to purchase a minimum of 0.01 BTC (and 0.1 for DASH, ZEC, XRP), while the maximum amount is 10. The limits are the same for selling cryptocurrency.
You can withdraw an unlimited amount in cryptocurrency — this means you can send as many bitcoin to your recipient as you’d like. The minimum transfer amount is 0.01 BTC.
For fiat currencies, there are different deposit and withdrawal limits depending on which type of account you have:
- Basic account. Deposit maximum of US$300 daily and US$1,000 monthly with a withdrawal maximum of US$500 daily and US$2,000 monthly.
- Verified account. Deposit maximum of US$20,000 daily and US$100,000 monthly with a withdrawal maximum of US$50,000 daily and US$300,000 monthly.
- Verified Plus and Corporate accounts. No deposit or withdrawal limits.
Because of these rules, the amount you can send to your recipient will be limited by the type of account you have.
CEX.IO is technically available to all countries. However, in some countries (for instance, Afghanistan, Iraq and Vietnam – see all the restricted countries on the cex.io website), credit card and bank-based transfers to the platform are restricted. This effectively bars many people from using CEX.IO.
What types of transfers does CEX.IO support?
- Bank transfers
- Credit card
- Crypto Capital
- Vouchers (for bitcoin transfers)
- Withdrawals to personal cryptocurrency wallets
What to look out for
- Cryptocurrency transfers can be complicated. Typical money transfer services handle all of the steps to send money. But when you transfer money through cryptocurrency, you need to perform all the steps yourself.
- Losing money on the exchange rate. You should consider exchange rates when depositing or withdrawing fiat currencies not supported by CEX.io.
- High buy and sell fees. CEX.IO charges a 7% transaction fee when you buy bitcoin. It also charges the same fee when you sell bitcoin.
- Opaque support centre. It may be difficult to find the answer you need in CEX.IO’s help centre because the search function often returns irrelevant results.
Benefits and drawbacks
|Global services||Open to all countries (subject to government regulations)||Credit card and bank-based transfers are not available in some countries|
|Transfer options||US dollars, euros, Russian roubles||Many currencies not supported|
|Pickup options||Bank transfer, credit card, Crypto Capital||No cash pickup|
|Competitive fees||No commission for bank deposits; reasonable fees for withdrawals||High fees for buying and selling bitcoin|
|Competitive exchange rates||Exchange rates based on market activity — often within 0.5% to 2% of the mid-market rate||Exchange rates may spike moment to moment|
|Minimum and maximum transfer amounts||High maximum transfer amount with verified account||Low maximum transfer amount with basic account|
|Convenient||Online-based platform||You need to complete all transfer steps yourself|
|Customer service options||Online ticket, email support||No phone support; help centre can be confusing|
To get started with CEX.IO, register for an account at the platform’s website. Consider using two-factor authentication with your account, which provides extra security.
After you’ve registered an account and confirmed your email, you can start your bitcoin transfer. Add a payment source and deposit fiat currency, then purchase your bitcoin.
CEX.IO is a solid bitcoin platform that can help you complete an entire money transfer. However, be careful of the fees you’ll pay when buying and selling bitcoin.
Frequently asked questions
Image source: CEX.IO