DXExchange
8/10
  • DXExchange

  • Founded: 2019
  • Regulated:  CySEC, EFI (Estonia)
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Exchange Name: DXExchange
Founded: 2019
Regulated:   CySEC, EFI (Estonia)
Ease of Use: Medium
Volume: Medium
Fees: Medium
US Traders:   Not Accepted
Mobile:   Yes

DXExchange Review

by Martin Kay

DX.Exchange is a newly launched Digital Asset Exchange that allows users to buy and sell Cryptocurrencies, Digital Stocks and Digital ETFs, using crypto or fiat money. The exchange is owned and operated by Coins Marketplace Technologies OÜ. located at Tallinn, Estonia.

The company is regulated and supervised by the Estonian Financial Intelligence Unit. Their license numbers are FRK000039 – “Providing a virtual currency wallet service” and FVR000051 – “Providing services of exchanging a virtual currency against a fiat currency”.

 

Why DX.Exchange Sucks In 50 Words

Digital Stocks are not available to USA customers because that would involve approval from the SEC. However, according to some reports that a U.S. launch might be underway. Apart from this, I noticed low trading volumes on some crypto pairs and digital stocks/ETFs, but that is probably because at the time of writing, DX.Exchange’s platform is live for a short period of time.

 

Why DX.Exchange Doesn’t Suck In 50 Words

They offer cryptocurrency and digital stock/ETF trading on the same platform AND they are fully regulated across the EU. Until now, these two asset classes were not jointly available, so people who wanted to trade both crypto and stocks had to open accounts with separate companies and go through the KYC procedure twice, which can be quite a hassle. It’s true that you can trade tokens and stocks at CFD brokers, but let’s not forget DX.Exchange is – yea, as the name says – an exchange, which is a very different ball game than a brokerage.

 

Is DX.Exchange A Scam?

It’s very rare to find a regulated crypto exchange, mostly because regulation is in its infancy when it comes to cryptocurrencies. Thus, the fact that DX.Exchange is regulated as a crypto wallet service and as a provider of crypto-to-fiat exchange services says a lot about them and distances them from all scam suspicions. In fact, I shouldn’t talk in absolutes because there’s always a risk when dealing with online companies, brokers, and exchanges.

Also, let’s not forget that DX.Exchange was just launched in 2019 (platform went live on January 7), so we don’t have a lot of history to go on but from what we can see so far, this exchange looks very promising, transparent and fully regulated.

 

Should I Open An Account With DX.Exchange?

I believe the actual question is: Do you want to buy/sell cryptocurrencies and digital stocks? If the answer is Yes, then what better place to do it than a fully regulated exchange, with a great platform. And speaking of the trading platform: it is available as a web-based version (no download, no install required) and features Nasdaq’s Matching Engine (“ME”) through a partnership between DX.Exchange and Nasdaq Technologies AB. The ME allows fast order matching and its connection protocols comply with the highest standards of the financial trading world. In plain English: It’s good! After all, we’ve all heard about Nasdaq and using the same order matching system as they do cannot be bad.

While the “ME” works in the back end, on the front end, DX.Exchange offers their own proprietary platform called DX5 (this is the interface that you’re going to see). It’s relatively easy to use, without an abundance of features but enough for most traders to go on. There’s information for each cryptocurrency, such as yearly high, yearly low and a few news items, which is a nice touch.

As for accounts, you won’t find the “regular” brokerage structure, meaning that DX.Exchange doesn’t have tiers like Gold, Platinum, VIP and others. There’s only one type of account and it doesn’t have a fancy name but the good thing is that you won’t have any perks locked behind huge deposit requirements. The minimum deposit is only specified after you open a real account, which I did for this review. As with most exchanges, the minimum deposit is very low and in this case it’s $2.00. I don’t know why you would want to deposit that low, but this exchange allows it so the minimum investment shouldn’t be a problem.

Although new on the scene, DX.Exchange has all the makings of a great exchange, one that shows innovative spirit by tokenizing securities and packaging them in a trade-friendly manner. And maybe, more importantly, this exchange is fully compliant with ESMA and MIFID 2 rules and has proper licenses for all the services they offer. What’s not to like?

 

What Are Digital Stocks

You’ve probably noticed I have been talking about “digital” stocks, not plain stocks so far and this warrants an explanation. These are smart contracts, ERC20 tokens, created on Ethereum’s network to represent the real stock and are backed 1:1 by shares of real stock. They function in a way like USD Tether (USDT), which is a stablecoin that is backed 1 to 1 by US Dollars held in the company’s bank account.

In the case of digital stocks, a company called MPS MarketPlace Securities, Ltd purchases real world stocks according to demand on DX.Exchange’s platform. So each of your purchased digital stock is directly backed by a real stock, which is held in segregated accounts by the issuer of the smart contract (MPS MarketPlace Securities, Ltd). The company is licensed by the Cyprus Securities and Exchange Commission (CYSEC) – license number 170/12, so we are dealing with another regulated company, which eliminates most risks.

 

What Are Turbo Tokens

Turbo Token (also known as Smart Leverage Token) is an innovative product launched by DX.Exchange, which basically allows you to trade leveraged cryptocurrencies in both directions (up and down), meaning that you will be able to profit even in a bearish market, or to hedge risks coming from other trades. However, Turbo Tokens are different from CFDs on cryptocurrencies because the buyer has ownership over the coins and can transfer them in any ERC20 compatible wallet. Another difference is the lack of overnight fees (which can become quite burdensome in some CFD cases) and the lack of margin calls.

Turbo Tokens can be traded with DXCASH and USDT against BTC, ETH, XRP, ADA and BNB, with 5x and 10x leverage. For example, if BTC/USDT moves 1%, then BTC/USDTX5L moves 1% X 5 = 5%. If you are using the 10x leverage, BTC/USDT 10X Turbo Token will correspond to 10 times the tick by tick price change of BTC in USDT. However, keep in mind that the leveraged price is determined on a tick by tick basis, so if BTC/USDT ends the day with a 5% gain, it doesn’t mean that the 10x Turbo Token will be up 50% over the same time frame. Think of it more like an index that tracks the changes of the underlying asset each second and perpetually changes based on tick by tick data.

There are two types of Turbo Tokens: Short (which will make a profit if the market is going down) and Long (which will make a profit if the market is going up). For example, BTCX5L is the symbol for the Turbo Token Bitcoin, with 5x leverage, and you would buy this token if you think the price is going up. If you think the price would go down, you would buy BTCX5S (“S” stands for Short, “L” stands for Long).

To conclude, Turbo Tokens have several advantages:

  • Can’t lose more than their value, which means 100% negative balance protection
  • They don’t have overnight interest charges like other margin or CFD instruments
  • Traders can profit in a bullish and a bearish market
  • Are transferable to ERC20 compatible wallets

 

DX.Exchange Online Presence and Reputation

So far the exchange has been called a “revolutionary” development for the crypto community. I don’t know if we should go that far with words, but it’s certainly an innovative company and I see many others following DX.Exchange’s path in the near future.

CEO and co-founder Daniel Skowronski has been a keynote speaker for the Bloomberg Crypto Summit that took place in December 2018 at the Bloomberg EMEA HQ in London. DX.Exchange is also a Crypto Centre sponsor on Bloomberg.com.

 

DX.Exchange Special Features

Apart from all the things already talked about, DX.Exchange also launched their own token called DXCash. It can be traded on the platform just like any other cryptocurrency but it can be also used to pay for trading fees and if you choose to do so, you will benefit for up to 50% discount on membership fees. A more recent addition is the introduction of Turbo Tokens, which we’ve discussed above.

 
 

DX.Exchange Ratings

User Friendliness 16/20

The website is well structured and easy to navigate; available in 9 languages. The platform is not overwhelming but not too simplistic either – it’s a nice balance of functionality and user-friendliness. Mobile apps and Demo accounts are not available at the time of writing.

 

Range Of Markets And Volume 15/20

DX.Exchange offers 10 cryptocurrencies, which can be traded against the US Dollar and Bitcoin. A few of them can be traded against USDT (Tether) and Ethereum (ETH). Currently, there are 14 digital stocks and 14 digital ETFs tradable against the US Dollar but the exchange plans of adding more assets in the future. Traders can use Turbo Tokens and benefit from 5x or 10x leverage. Just make sure you know the risks because leverage can increase profits as well as losses.

Volumes are fairly low at this time, mainly because their client base is relatively thin due to their short time in business.

 

Fees 15/20

There are two Fee Plans as follows: the first is a Monthly Membership which costs $20 but will be reduced to $10 if you pay using DXCash. Up to a monthly trading volume of $50,000, you will not need to pay any other fees but if you go above that you will need to pay 0.25% (or 0.20% if you use DXCash). The higher the trading volume goes, the lower the fee.

The second fee option is a Trading Volume Plan, which will require you to pay for each trade: 0.25% (or 0.20% if using DXCash) up to $100,000; 0.20% (0.15% with DXCash) for volumes up to $500,000. Even bigger trading volumes will have lower fees. Please note that almost all exchanges charge a trading fee – usually 0.25% per trade.

 

Deposits And Withdrawals 16/20

Clients can use credit cards, wire transfers, and cryptocurrency to fund their accounts and to withdraw. Credit card deposits/withdrawals come with a 5% fee, wire withdrawals are charged $15 + 0.1% and wire deposits are charged $7.5 + 0.05%. Crypto deposit fees are zero and very low for withdrawals. Overall I feel these fees are a bit on the steep side so they could use a bit of tweaking and lowering.

 

DX.Exchange Extras 18/20

They have their own coin that cuts fees to 50%, Turbo Token (smart leverage token), EU regulation and they’ve successfully managed to tokenize securities. All in all, a great offering and an exchange that we will probably hear more about in the future.

 

DX.Exchange Overall Rating: 80/100

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