The world of cryptocurrency derivatives exchanges has become incredibly crowded over the past 18 months. This increase in the amount exchanges has inevitably lead to an exponential increase in competition.
This has benefited traders who now have multiple avenues and platforms to trade with thousands of products. This however has made it increasingly difficult for new exchanges to get on the map and make a name for themselves.
Can CoinFLEX standout from the pack? In this review we hope to answer that question.
Review in Summary
|Founders||Mark Lamb, Sudhu Arumugam|
|Available Markets||13+ Including Spread, and Repo Trading|
|KYC and AML||Required for Withdrawals Above 10000$ a Day|
|Can U.S Users Sign Up?||U.S Users are Prohibited from Using CoinFLEX|
|Trading Fees||-0.02 Maker, 0.06 Taker|
In this review of CoinFLEX we will assess the exchange based on 4 key criteria. Safety, Security, and Regulation. Trading Fees. Markets and Standout Features, and finally Ease of Use. We will finish by giving our conclusion and score rating.
Founded by Mark Lamb and Sudhu Arumugam, CoinFLEX launched in 2019. Mark has been in the cryptocurrency space since 2012 previously co-founding Coinfloor a UK based cryptocurrency exchange.
Sudhu has spent 20 years in various roles for banks and hedgefunds. Dealing with a variety of markets and trading products. From options, and stocks, to fixed income products.
Two other significant members of the team are Leslie Tam, Chief Strategy Officer. And James Cunningham, Chief Operating Officer. Leslie Tam previously worked at crypto giant Binance working on account coverage and OTC trading. He also previously worked in the traditional finance at Bank of America and Merill Lynch.
James Cunningham before joining CoinFLEX came from a quantitative and high frequency trading background. Working on UBS’ algorithmic trading desk and was a founding member of IVC Capital’s high frequncy trading hedge fund.
Safety, Security, and Regulation
CoinFLEX has industry standard support for Google 2 factor authentication (2FA). 2FA enables users to add an additional barrier of protection. Ensuring that should an attacker have access to both your email and password they still would not be able to access your account funds.
In terms of platform security CoinFLEX discloses very little. This is done on purpose. CoinFLEX explicitly state on their security page that they purposely do not disclose the full extent of their security measures.
All CoinFLEX states is that they use multiple security systems and services to monitor potential exploits. These include hacking attempts, as well as denial of service attacks.
In terms of the teams track record it is strong. The team has over 7 years of experience in being a cryptocurrency custodian without a breach.
The custodian (who holds funds for CoinFLEX) for the exchange is Bitgo one of the major cryptocurrency custodians. Each Bitgo wallet also has $100 million in insurance coverage so there is some claw back should the worst ever happen.
KYC and AML
Because CoinFLEX does not deal with actual US Dollars its KYC and withdrawal restrictions are more lenient than other cryptocurrency trading platforms. Just by signing up to CoinFLEX users can withdraw up to 10000$ a day.
Users can then choose to complete KYC and withdraw over 10000$ a day. This can currently be done by emailing the CoinFLEX on-boarding team.
CoinFLEX does not accept users from or residing in the United States of America.
CoinFLEX is registered under Liquidity Technologies Ltd incorporated in the Republic of Seychelles. This may be a red flag to some but is common practice among cryptocurrency exchanges. Cryptocurrency giant BitMEX is also registered in the Republic of Seychelles
In order to be a competitive exchange in the cryptocurrency space it is almost required that you register in jurisdictions where financial regulations are more lenient. Jurisdictions such as the EU and the USA make operating a cryptocurrency derivatives exchange almost impossible.
CoinFLEX Trading Fees
In terms of trading fees CoinFLEX is very competitive and beats out some of the largest cryptocurrency exchanges. CoinFLEX also its own exchange token FLEX. Holders of this token can get cheaper fees based on the amount of FLEX they hold. But even without holding any FLEX CoinFLEX’s fees are very cheap.
|FLEX Balance||Derivatives||Spot Markets||Spread Trading||Repo Trading|
|0||-0.02% Maker, 0.06% Taker||0.06% Maker, 0.10% Taker||0.03%||0|
|1000||-0.02% Maker, 0.03% Taker||0.02% Maker, 0.06% Taker||0.01%||0|
|100,000||-0.02% Maker, 0.03% Taker||0.01% Maker, 0.04% Taker||0.005%||0|
|500,000||-0.02% Maker, 0.03% Taker||0% Maker, 0.03% Taker||0.005%||0|
Deposit and Withdrawal Fees
CoinFLEX does not charge fees on deposits or withdrawals. Withdrawing or depositing coins will only incur network fees.
CoinFLEX Fees in Comparison to the Competition
We have made the statement that CoinFLEX’s fees are very competitive. Well how competitive you may ask. The tables below shows CoinFLEX’s fees in comparison to 3 top cryptocurrency exchanges. BitMEX, Binance, and FTX. Each exchange has their own fee structures based on trading volume and whether you hold their token or not so we are assuming the lowest fee level and holding 0 exchange tokens.
|Exchange||Maker Fee||Taker Fee|
Out of these major exchanges CoinFLEX comes out significantly better. The only exchange that comes close in terms of fees is BitMEX and CoinFLEX still has a 0.015% cheaper taker fee.
Markets and Standout Features
Trading Pairs on CoinFLEX
CoinFLEX has what you would expect from an exchange in its infancy in terms of trading pairs. Currently there are 14 markets on CoinFLEX. Perpetual swaps, spot markets, futures, spread markets, and repo markets for a combination of BTC, ETH, USDT, and FLEX.
CoinFLEX’s Repo Markets
Repo markets in traditional finance are a form of short term borrowing. They are typically used to increase short term liquidity. Repo markets are often used by central banks to control the supply of money within an economy.
Repo markets work something like as follows: Seller A holds 100,000 government bonds valued at 1$ each. Seller A needs some short term liquidity. So he sells these bonds for 100,000$ to Buyer B. 24 hours later Seller A buys his bonds back for 100,500$. The additional 500$ on top of his 100,000$ payment represents the overnight interest rate. In this scenario both parties win. Seller A got the short term liquidity he needed and Buyer B earned 500$ on his spare cash.
CoinFLEX’s Bitcoin Repo works in a similar fashion. If you buy you are willing to supply your dollars for a Bitcoin. If you sell you are wanting dollars for your Bitcoin.
Buyer A has spare dollars sitting on CoinFLEX so he decides to buy 1BTC (10000$) on the repo market. Here he will lend 10000$ to the seller and receive 1BTC. Seller B now has 10000$ in short term liquidity. After 24 hours pass Seller B will buy back his Bitcoin for 10010$. The additional ten dollars again representing the short term interest rate.
Spread markets like repo markets are popular in traditional finance. CoinFLEX’s spread market is however the first of its kind in the crypto space.
Spread trading is essentially trading the difference between the current price of Bitcoin and the future price. The formula for CoinFLEX’s spread market is as follows: [Quarterly futures price] – [Perp price]
To understand this we must have a basic grasp of futures trading. Futures contracts are agreements to buy and sell a particular asset at a predetermined date. So when you are trading a futures contract you are trading the future price rather than the current price. This leads to a discrepancy in price and is the basis of spread trading.
Spread trading is often an expression of market sentiment if investors expect Bitcoin to soar then the spread between the futures and spot will too. You can read further about futures trading strategy’s in our article on futures arbitrage, alternatively you can read CoinFLEX’s contract specification page.
Despite only launching recently CoinFLEX’s spread markets has seen huge volume. Doing over 100 million dollars in trade volume which goes to show trader interest in spread markets.
One feature that CoinFLEX is hoping that will onboard new users is trading competitions. CoinFLEX has done competitions based on a variety of rulesets. The most previous one involved using CoinFLEX’s new bracket orders. There is currently plans to allow users to run their own trading competitions.
There is also official CoinFLEX competitions based around its spread market planned for the near future.
Liquidity on CoinFLEX
In terms of liquidity CoinFLEX is doing well for a newly revamped exchange. With data provided by Skew we can see how volume on CoinFLEX has progressed.
As you can see the launch of CoinFLEX’s spread market brought a big boost to volume noted by the large uptick after the 20th of July as we have mentioned bringing over $100 million in daily volume.
CoinFLEX’s perpetual contract market also has decent liquidity. Where CoinFLEX falls short is in its spot markets so traders may want to look to other avenues.
Ease of Use
In terms of ease of use CoinFLEX is what you would expect from a derivatives exchange. After you go through the process of creating an account and depositing funds the trading experience is like that of any other exchange.
In the top left hand corner you have a list of available markets. Below that you have all your market information. A price chart, depth chart, orderbook, and a order entry tab.
Down the bottom is where you can view your positions, active orders, and trade records. At the very right then is the contract details for the market you are trading.
Now that we have assessed CoinFLEX on all our key we can finally give our conclusion and final score
Even though CoinFLEX is just after completely revamping the exchange it is still bringing exciting new trading products to the cryptocurrency space. Its Repo and Spread markets are the first of its kind in the cryptocurrency space.
Trading fees are also some of the lowest we have seen. Being more competitive than some of the largest platforms despite not having the same economies of scale.
Creating an account is also clear and straightforward. The daily withdrawal limit of 10000$ a day without KYC is also significantly higher than than that of other derivatives exchanges such as FTX.
Liquidity is good for a newly revamped exchange. But on the more niche markets it is very low. The huge volume the newly launched spread market received is an encouraging sign but this needs to continue. What will determine CoinFLEX’s success going forward like every other exchange is their ability to onboard new users.
So can CoinFLEX standout from the pack? Yes, as long as it continues innovate, and in doing so attract new users.