What are Cryptocurrency Exchanges?
Cryptocurrency exchanges are the gateways to buying and selling cryptocurrency and utility tokens (e.g. Ethereum ERC-20 tokens) on the internet. Much like traditional stock exchanges which have online brokers such as Commsec or CMC Markets for investors to buy and sell shares, cryptocurrency exchanges allow users to trade cryptocurrency with others users, or purchase cryptocurrency using fiat funds through their bank account or other means. There are now several Australian Cryptocurrency Exchanges for investors to use.
Typically, these exchanges are the ‘middle-men’ to cryptocurrency transactions, and will charge fees based on the amount of the transaction (usually a percentage base). They may also charge fees for depositing fiat funds into an account, as well as for withdrawing cryptocurrency from a user’s exchange account to their own personal wallet.
This is known as moving your cryptocurrency off an exchange – something extremely important to do, since ownership does not truly occur until this is done, unlike with traditional stocks that are tracked by regulatory bodies.
What are fiat gateways?
A fiat gateway is an exchange that allows a user to deposit fiat (cash) into the platform to then spend on cryptocurrencies. For a newbie into the world of cryptocurrency, a user must typically purchase the cryptocurrency using cash. It’s a bit like the chicken and the egg – which comes first.
For those wanting to enter the market, it’s a cash deposit that must come first. For the early adopters of cryptocurrency who mined Bitcoin using their computers, they don’t require fiat deposits and can trade their hard-earned Bitcoin back and forth with other users and for other tokens using an exchange (even an exchange that doesn’t accept fiat deposits).
It’s important to note that not all countries or exchanges allow fiat deposits for cryptocurrency, however, many Australian exchanges do allow this, usually through the PoLi system (Australia Post) or through BPAY. There are even some alternative methods in Australia such as a platform called Blueshyft which allows a user to go into a participating newsagent and pay cash over the counter for an instant credit into their exchange account.
Australian Cryptocurrency Exchanges and KYC/AML
You may have heard of KYC and AML before if you’ve ever researched or even participated in an ICO (Initial Coin Offering) or worked in the gambling or financial services sector. Know Your Customer (KYC) is government-enforced legislation that falls under the Anti-Money Laundering and Counter-Terrorism Financing Act 2017. The act aims to prevent money laundering and the financing of terrorism by requiring businesses who provide ‘designated services’ to collect and verify customer information.
AUSTRAC, which is the Australian federal governing body of the AML/CTF Act 2017, recently made amendments to the former act (AML/CTF Act 2006) to ensure digital cryptocurrency exchanges were complying.
The KYC process is usually done online by the user, who uploads proof of identify and supporting documentation to the service for verification before they are allowed to use the service (or participate in an ICO). For example, documentation such as passports, driver’s licenses, utility bills and birth certificates are usually required for KYC. Your full name, address, date of birth and proof of residence is also quite commonly required. Occasionally, KYC even goes one step further and requests a photograph of a user clearly holding their identify documentation.
Anti-money laundering is the sister to KYC. It’s used to prevent – as its title suggests – money laundering, and any illegal generation of money by criminal organisations. Typically, AML runs on the platform side of an exchange and is a set of checks and balances done by the exchange to ensure no transactions are flagged for being suspicious, such as an unusually large transaction or deposit, or coins being moved from address to address in strange ways.
Like banks who do credit card and transaction monitoring using sophisticated software algorithms, exchanges have the same verification systems in place since they too have to answer to governments who are closely monitoring and watching the cryptocurrency space.
Australian Cryptocurrency Exchanges
Below is a list of some of the most popular Australian Cryptocurrency Exchanges, which are used for buying and selling cryptocurrencies. In addition for transparency, some of the links to these exchanges contain affiliates links, meaning if you sign up and trade, we get a small commission at no cost to you. We will try and keep this guide updated over time as new exchanges go live and new coins are added.
CoinSpot is an Australian exchange that has been in operation for a number of years and is based out of Melbourne. It’s one of the only Australian exchanges to offer a very large variety of tokens with a simple interface that’s extremely user-friendly to navigate for newcomers to cryptocurrencies.
- Coins: A huge range of tokens (85+), from the popular giants to lesser-known and obscure tokens. Significant tokens include Bitcoin, Ethereum, Litecoin, OmiseGo, ETHOS, Steem.
- Pros: Easy to use interface, PoLi and BPAY deposits, wallets for all coins purchased on the exchange, Two-factor Authentication (2FA), one of the only exchanges to list 85+ tokens with a fiat gateway, ADCA accredited.
- Cons: Withdrawals for some tokens are occasionally suspended due to background technical issues, no advanced trading features such as limit orders.
Sign Up With Coin Spot
Bit Trade is Australia’s longest running exchanges. Founded in 2013, the founders are also behind the Australian Digital Commerce Association. Offering the major cryptocurrencies such as Bitcoin, Ripple, Ether, and Litecoin, the platform provides Australian’s a simple and secure way of purchasing cryptocurrency.
- Coins: Bitcoin, Ether, Litecoin, Ripple
- Pros: Excellent security using customers own wallets, Australia’s longest running exchange, simple and easy interface, competitive and low fees, Pay bills with crypto feature, OTC trading desk options, 24/7 support, friendly and experienced staff.
- Cons: Limited coins
Sign Up With Bit Trade
Founded in 2013 in Sydney, Independent Reserve is an Australian Cryptocurrency exchange where investors, traders and everyday people come to sell and buy Bitcoin and Ether. Independent Reserve is a robust platform, offering trading via a registered Australian company.
- Coins: Bitcoin, Ethereum, Bitcoin Cash, Litecoin, OmiseGo, 0x
- Pros: Accreditation by the Australian Digital Commerce Association, very competitive fee structure with a maximum of 0.5% brokerage fee on trades.
- Cons: Limited Coins.
Sign Up With Independent Reserve
BTC markets is another Australian exchange based out of Melbourne, and offers 6 of the top cryptocurrencies by market capital. A popular exchange for more advanced users and traders, it offers in-depth charting tools for margin trading and a robust, stable platform.
- Coins: Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash, Ethereum Classic, OmiseGo
- Pros: Robust charting tools, limit orders, BPAY deposits, reasonably prompt support and good social media presence.
- Cons: Occasional withdrawal glitches, minor user interface annoyances, limited coins.
Sign Up With BTC Markets
Coinjar is one of those Australian cryptocurrency exchanges that offers a friendly and secure way to manage your online finances, and regularly transfer fiat currencies to and from bitcoin. It also has a competitive advantage with a slick mobile app presence and crypto-based EFTPOS debit card.
- Tokens: Bitcoin.
- Pros: Slick mobile app, fee-free deposits, easy to use interface, EFTPOS card for spending Bitcoin across Australia.
- Cons: Only deals with Bitcoin. No advanced interface for traders or in-depth charting. Intended for newbies, consumers and non-traders.
Sign Up With CoinJar
Gary Denne is an Australian-born writer and technology evangelist with 20 years tech Industry exp. Loves crypto, stocks, cats, outdoors & healthy living. Not a fan of gluten ?