The Australian crypto exchange market has experienced a significant growth surge in the last year, overcoming sluggish crypto price movements and global economic strife to add over 70 new crypto exchanges to the ranks of Aussie trading platforms.
The Australian Transaction Reports and Analysis Centre (AUSTRAC) confirmed earlier this year that over 312 cryptocurrency exchanges are now registered in Australia, a significant increase over the 246 exchanges active in February 2019.
AUSTRAC, which functions as Australia’s financial intelligence agency and is responsible for Anti-Money Laundering regulation, has regulated cryptocurrency exchange platforms in order to minimize the risk of criminal behavior such as terrorism financing, cybercrime, and money laundering.
Any exchange platform that intends to launch a crypto trading platform in Australia must first formally register with AUSTRAC and provide evidence that the platform will implement anti-money laundering and counter-terrorism financing controls.
AUSTRAC takes cryptocurrency exchange regulation seriously — to date, the regulatory body has canceled the registration of multiple platforms that include several cryptocurrency exchanges and a number of cryptocurrency ATM machine businesses.
Notably, AUSTRAC has revoked the licenses of AUSCOIN ATM and MK Buy & Sell, platforms associated with Lamborghini-driving Bitcoin trader Sam Karagiozis.
A joint raid executed by AUSTRAC and the AFP saw properties linked to Karagiozis raided in 2019. Karagiozis, subsequently charged with drug-related offenses, is currently fighting for the return of assets confiscated during the raid.
For many people, finding the right cryptocurrency trading platform has always been a challenging task. To date, the cryptocurrency trading industry is still very fragmented, as there arguably isn’t a single platform that solves all of the customer pain points.
To a lay person, the term ‘cryptocurrency exchange’ is typically used to address every single crypto trading platform. However, this is far from the truth. When considering where to trade cryptocurrency, one needs to choose between an exchange, a broker or a P2P trading platform.
Of course, each category outlined above has its own pros and cons. To help us understanding these pros and cons, it is useful to lay out some key attributes a customer looks for in a crypto trading platform:
Security;
Privacy;
Ease of onboarding;
Speed of deposits / withdrawals;
Qualify of customer support;
Level of fees;
Liquidity;
Rewards;
Range of trading assets; and
Quality of trading engine.
At Coinstash.com.au, we have surveyed more than 200 people. The paramount consideration among our sample audience is security. This is unsurprising given the number of exchanges that have gone under over the years. Now we have set the scene, let’s take a look at each category and see how they fare against one another.
An exchange is much like the Australian Stock Exchange, but for cryptocurrency. It has an order book with buy and sell orders. Various traders around the world can then place their orders and they either get filled or added to the book. Reputable global exchanges include Binance, Liquid and Kraken to name a few. In Australia, the top two exchanges are BTCMarkets and Independent Reserve. Exchanges typically have large volumes, high liquidity, fast settlement, large range of trading assets and lower fees. The downside of exchanges is that they are typically not very beginner-friendly and lack real-time customer support. Lastly, there are a lot of negative press around exchanges going down and losing customers’ funds, including the infamous Mt Gox incident.
A broker platform such as Coinstash.com.au offers a more tailored, customer-centric service compared to an exchange. This is why many high networth individuals typically have a go-to broker rather than trading themselves on an exchange. A broker platform is exactly as it sounds — imagine ringing up your stock broker and asking them to buy $10,000 worth of a certain stock by a certain time. In the crypto world, a broker platform acts as a nice fiat gateway which enables customers to get their coins with a few clicks of a button, at a price set by the broker. At Coinstash.com.au, they even offer a dedicated account manager for each active customer, enabling a true broker experience. Coinstash has also demonstrated its credibility by participating in Australian Government Austrade’s landing pad program.
A P2P (peer to peer) trading platform such as LocalBitcoins and Paxful are useful for new traders who want to protect their privacy. This is because personal information is typically only given to the other trader and not necessarily shared with the platform. P2P trading platforms also tend to have flexible payment options which is a bonus for many new traders. The downside of P2P platforms includes the fees are typically high, customer experience can vary depending on the counterparty, as well as the risk of receiving laundered money.
