Today, cryptocurrency trading is already a full-fledged multibillion-dollar market with its own laws, rules, fundamental features and principles.

Cryptocurrency exchanges play an important role in this market, organizing trading for everyone who wants to earn from fluctuations in the rate of cryptocurrencies.

EXCHANGES MUST NOT TRADE AGAINST TRADERS
The main principle of an exchange is impartiality. Therefore, involving the exchange in the trading process not as an arbitrator, but as a counterparty, can be dangerous for traders.

After all, traders see the exchange as a guarantor of obligations in the relationship between the buyer and seller of cryptocurrency.

That is why the exchange does not trade, but organizes trading, being responsible for the work of the trading terminal, the order book, the safety of traders’ funds and other administrative issues.

And for this work, the exchange gets its reward in the form of generous commissions charged from traders, which is fair enough.

Commissions of cryptocurrency exchanges:

• Deposit fee. Charged by the organizers of trades for depositing funds into a trading account. As a rule, it is set by the organizers of trades and depends on the amount deposited. Accordingly, the more is the deposit, the lower is the commission percentage.
• Withdrawal commission. By analogy with the first commission, set by the exchange and depends on the client’s status, which is determined by the size of the deposit and the sum of withdrawal.
• Commission for a trading operation. From each transaction organizers of trades receive the commission for service of trading operation. It may vary from 0.00 to 0.25 percent of the transaction, and may also depend on the client’s status.
• Commission for absence of trading activity. Not charged by all exchanges. Assumes the removal of a certain percentage of your deposit, if during the time set by the agreement with the exchange you have not performed any trading operations.

How cryptocurrency exchanges charge fees
The principle of charging and forming commissions on all cryptocurrency exchanges in general is the same, but the size largely depends on the will of the administration of each individual exchange.

Therefore, if you do not want to overpay, be sure to read the client agreement before making a deposit on the selected cryptocurrency exchange.

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However, the prolonged downtrend that followed left many of them disappointed.

There are several reasons for this: some of the traders sold cryptocurrency, closing trades at a loss, while others, having gained patience, sadly look at the continuing development of the downtrend, making their deposit smaller and smaller.

However, there are those among traders who were able to take advantage of the situation and made good money on the epic drop in the price of Bitcoin and other cryptocurrencies, resorting to margin trading services provided by some cryptocurrency exchanges.

MARGIN TRADING.
Margin-based arbitrage trading is not at all a new type of trading in the exchange and over-the-counter markets. Trading with leverage, as it is also called, appeared on financial markets thanks to London Stock Exchange LSE, where the first CFD-contract was concluded in 1992.

Subsequently, CFD margin trading became widespread through numerous exchange and over-the-counter brokers, creating an entire industry, which many of us know as “forex trading”.

WHAT IS MARGIN TRADING
Essentially, a leveraged arbitrage trade is a kind of bet between a broker (or exchange) and a trader, secured by collateral on each side.

THE MAIN ADVANTAGES OF MARGIN TRADES ARE:
The possibility of entering into a transaction with a volume that is several times greater than your deposit. This effect is achieved thanks to technology of leverage, thereby increasing your profit by several times.
The ability to earn both on the rise and fall in the price of an asset. And here it is important to note that it is possible thanks to the fact that you do not buy or sell the asset itself, but only conclude a contract on change of cost under the guarantee of fulfillment of obligations.
Margin trades on the cryptocurrency exchange

OBLIGATIONS IN MARGIN TRADING
THE EXCHANGE UNDERTAKES:

1. open or close the trade at the nearest available price or the price specified in the pending order.
2. Pay you a profit on the trade.
3. To give the leverage, according to the size specified in trading conditions.

TRADER UNDERTAKES:

1. Provide a deposit (margin), determined by the size of a deal (it is calculated automatically at the moment of conclusion of a deal). 2.
2. 2. Ensure that the amount of loss on the deal does not exceed the maximum size of the trader’s deposit.

Now, as you can see, you have an opportunity to earn on cryptocurrency, not only buying it based on price growth, but also to earn by means of margin transactions, making bets with cryptocurrency exchanges, both rise and fall of quotes.

CRYPTOCURRENCY EXCHANGES WHERE YOU CAN TRADE WITH LEVERAGE
To date, the crypto market has not many exchanges where traders can trade on margin. Poloniex, Bitfinex, CEX.IO, Kraken, GDAX are among them, given their popularity and long term operation.

However, one should not forget that in addition to cryptocurrency exchanges, margin trading in cryptocurrencies is also available through OTC brokers’ platforms, which often have better trading conditions than cryptocurrency exchanges.

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In addition, the high volume of fictitious trading contributes to the popularity of the site and attracts new traders to it. Which cryptocurrency exchanges have been involved in such scams? That’s what we’ll talk about today.

THE CONCEPT OF FICTITIOUS TRADING
This is a type of market manipulation in which a trader buys assets from one broker and then sells them through another brokerage company.

This is how speculators buy and sell stocks without risking a loss. The U.S. Commodity Exchange Act defines these transactions as illegal activity.

CRYPTO EXCHANGES OKEX AND HUOBI ARE UNDER SUSPICION
According to cryptotrader Sylvain Rybs, most of the trading volumes on these exchanges are just a sham.

He conducted a special analysis, during which he studied the order books of several major cryptocurrency exchanges in order to determine to what extent the implementation of cryptocurrency worth $50 thousand will collapse the price.

In his analysis, Ribes applied the concept of “slippage,” defining it as the change (as a percentage) between the average and the minimum value that had to be agreed to in the process of selling the currency.

A study of bids from Bitfinex, Kraken, Binance and GDAX exchange platforms revealed an odd fact: they showed different results for the same transaction.

Rabes reports that he found a huge discrepancy between the various platforms. In his opinion, this difference cannot be explained by differences in user behavior. Reibes is sure that it can only be explained by the fact that the figures are inflated (and even up to 95%).

The first place among the suspects is the exchange OKEx. Its trading volume is approximately $1.7 billion.

How to identify a dishonest cryptocurrency exchange

SYSTEM OF DESIGNATIONS:

• blue icons – exchange platform Kraken;
• blue – Bitfinex;
• orange – GDAX;
• red – Okex.

The researcher admits that he expected to find volumes created artificially, but the real scale shocked him.

He found that a large number of pairs with trading volumes at the level of $5 million have a slippage of over 10% when exchanging 50 thousand cryptocurrency assets. Rabes believes that these values prove that a large percentage of the volume on OKEx is fictitious.

Reibes saw similar transactions on cryptocurrency exchange Huobi Pro. He believes that about 81.8% of the volume there is bogus.

But trading floors Binance and Poloniex did not arouse suspicions. The researcher did not identify any questionable activity on them.

There is an important detail: if the platform had no possibility to conduct such machinations, the system would inform clients that these transactions do not comply with the rules of the site.

Due to fictitious trading, the market shifts in the direction the manipulator wants, which is why such manipulations are forbidden on trading platforms.

Suspicions about Bitfinex are justified: a video was posted on one of the portals showing the most common methods of fictitious trading on this platform.

SYSTEM ERROR?
Exchange users often debate this: are such incidents a random software error or is it an intentional violation of exchange trading norms?

For example, LedgerX allows users to trade bitcoin cryptocurrency as a derivative, but the exchange does not allow any actions related to fictitious transactions.

On the other hand, Bitfinex does not have an algorithm prohibiting such transactions. It is possible to conduct speculative transactions with cryptocurrency on the exchange without restrictions. It turns out that Bitfinex approves fraud.

WHY EXCHANGES NEED FICTITIOUS TRADING
Because it increases currency turnover, which creates the deceptive impression of large-scale trading. This, in turn, raises the position of the exchange in all sorts of ratings.

Earlier, Bitfinex representatives confirmed that there were cases of fictitious transactions on the platform. But the situation has not been corrected.

After the head of the exchange’s strategic department Phil Porter spoke to the media, many users believed that he was aware of these cases and deliberately did not fix the mechanism allowing fictitious trading on Bitfinex.

Users have expressed various speculations as to why Bitfinex management allows such violations. They suggest that the crypto exchange has problems with bank accounts and the reason for condoning fictitious transactions could be the company’s desire to stay afloat.

According to another version, money laundering can be a reason for fake deals. There are hypotheses that the exchange is laundering cryptocurrency assets through EOS ICOs.

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All of them are related to the unfair attitude of trade organizers to the level of security of trading accounts, resulting in either the theft of client funds or accusations of manipulation of trade asset quotations.

All of these problems arise for two reasons: human error and vulnerability to hackers, and blockchain technology was developed to combat their influence.

PROBLEMS OF CENTRALIZED EXCHANGES
Of course, to say that all cryptocurrency exchanges cheat their customers would be completely unfair.

In this article we don’t want to advertise reliable exchanges, as well as anti-advertise those who have shown themselves to be dishonest. In general, there is a lot of information available about all of these exchanges among cryptocurrency traders.

However, speaking about the general reasons why your deposit or trade could be at risk, it should be noted that the disadvantages we describe are theoretically the bottleneck of any centralized cryptocurrency exchange.

FINANCIAL RISKS
Any cryptocurrency exchange can face sudden withdrawal of too many deposits or lack of funds in competition for traders’ sympathies. As a result, when such an exchange closes down, not all traders will be able to get their deposit back.

SECURITY ISSUES
No matter how hard crypto exchanges try, but accumulation of clients funds, even on a few accounts, inevitably leads to finding a hacker who finds access to them.

LACK OF REGULATION
Even if it is insignificant, but still there is a chance that tomorrow organizers of trades will pack their belongings and leave to islands, leaving traders with naked deposits, many trading participants do not sleep well.

And, unfortunately, for the vast majority of the cryptocurrency market, there is no one authority that can help in this situation.

The problems of centralized cryptocurrency exchanges

HOW A DECENTRALIZED EXCHANGE SOLVES THESE PROBLEMS
The very principle of decentralization, which already seems to have been forgotten by the participants of the cryptocurrency market, is fully realized within the framework of decentralized cryptocurrency exchanges.

After all, when you transfer your funds to a cryptocurrency exchange that is fully managed by a blockchain, you are automatically out of the risk zone outlined by the problems listed above.

Any activity you do with your deposit is subject to a distribution registry, with no risk of replay or unauthorized access to it.

Each trade is a separate smart contract that cannot be closed, deleted or corrected without your knowledge. No one can simply withdraw funds that belong to other users from a distribution registry.

These reasons are enough to make your choice in favor of decentralized exchanges, which platforms such as Waves and EOS are already actively joining.

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However, it is not an easy task, especially when you consider that there are hundreds of cryptocurrency exchanges. In this article, we will look at four popular cryptocurrency exchanges with their benefits and features to make your choice easier.

BINANCE
The cryptocurrency exchange Binance launched in 2017. It features one of the highest trading volumes.

HERE ARE THE MAIN BENEFITS OF WORKING ON BINANCE:

• A large selection of trading instruments: over 500 cryptocurrency pairs;
• the site cooperates with law enforcement and government agencies;
• It is necessary to pass the verification, which indicates a high level of security;
• users can withdraw up to 100 bitcoins.

HOWEVER, THERE ARE SOME DISADVANTAGES:

• some cryptocurrency instruments are either illiquid or delisted;
• the exchange is still without a license;
• KYC verification procedure is time-consuming.

As for deposits and withdrawals, they can be made in any cryptocurrency that is represented on the exchange. And to deposit from a bank card, you need to use the Simplex service. The amount of commission is 3.5%. And it is possible to withdraw funds only in the form of cryptocurrency.

The amount of commissions for transactions varies depending on how much was traded during the month. The higher the traded volume, the lower the commission. Also, the types of orders affect the amount of commissions.

Spreads on this crypto exchange are floating and depend on what the current volatility is in the market. The use of leverage is possible when trading settlement futures (varies from 1:2 to 1:125).

Also Binance offers the use of referral programs and a number of related projects (from analytical and educational, to the services of token issue).

BITMEX
The BitMEX crypto exchange was created even earlier, in 2014. It differs from Binance with a smaller list of trading instruments, and its turnover exceeds $3 billion.

1. trading instruments: 9 pairs with cryptocurrencies and fiat currencies.
2. lack of regulation.
3. the exchange does not publish any reports.
4. BitMEX has been under investigation by the CFTC commission since 2019.
5. There is no KYC verification procedure (registration and deposit procedure is fast).
6. Only bitcoins can be deposited to the account.
7. No deposit and withdrawal fees.

When trading on BitMEX there are rebates from 0,025% to 0,05%. The commission for the takers is 0.075-0.25%. The spread is also floating and varies depending on what the current volatility of the market is. Leverage is present, but differs for different currency pairs. There is also a referral program, but there are no additional services.

CURRENCY.COM
The Сurrencies.com exchange is not only a regulated trading platform, but also a place where cryptocurrency funds can be invested in a number of traditional assets, ranging from futures to bonds.

1. trading instruments: BTC, BCH, ETH, LTC in pairs with dollar, euro.
2. Access to exchange, margin and leveraged trading.
3. Over 1,300 assets including both cryptocurrencies and traditional instruments.
4. Obligatory verification.
5. KYC procedure with fast verification of documents.
6. Depositing cryptocurrency and fiat currency accounts via bank card or transfer.

Trading commissions and spreads on this exchange vary depending on the type of asset and type of operation. Commissions range from 0% to 0.05%. The size of the leverage depends on the traded asset and can be chosen by the trader.

Сurrencu.com has both a referral program and additional services such as mobile applications, Russian-language support and personal data protection.

PRIMEXBT
The fourth in our list will be the PrimeXBT platform, which also gives access to trade not only cryptocurrency, but also fiat currencies, commodities and stock indices.

ITS MAIN FEATURES ARE:

• 39 trading instruments;
• no license;
• no verification procedure;
• anonymous trading using PrimeXBT service to track suspicious transactions;
• depositing in bitcoins with the possibility of exchanging money within the platform itself;
• commissions differ for different trading instruments: from 0.001% to 0.05%;
• floating spread;
• The possibility of independent choice of leverage.

The PrimeXBT platform has a referral program consisting of four levels. Among the additional services there are mobile applications.

After comparing these four platforms, you can choose the one that is right for you for full-fledged cryptocurrency trading based on your own priorities and preferences.

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