Tokyo-based bitFlyer is arguably Japan’s No. 1 cryptocurrency exchange based on trading volume. And while they lead in Japan, they’re also competitive on a global scale. For example, bitFlyer’s 2017 trading volume was USD 250 billion, USD 150 billion of which occurred in the final two months of the year when the BTC price was rallying.
bitFlyer, a bitcoin marketplace, boasts multi-sig security, cold-wallet storage for BTC, two-factor authentication on the security side in addition to margin trading, leverage, a prepaid Visa card and more. No doubt there’s lots going on at bitFlyer, but one thing that the trading platform has managed to avoid is a major security breach. They also boast security coverage for user assets.
Despite the turmoil that rocked its neighbor, Coincheck, in a NEM-fueled hack, bitFlyer has largely remain unscathed in this way since it was launched in 2014. bitFlyer surpassed the 2 million user threshold in March 2018.
The exchange entered the US market in 2017 and debuted in the EU in Q1 2018. Now that bitFlyer operates in the United States, it threatens to take market share from popular US-based exchanges Coinbase and also Gemini, as evidenced by users who say they are interested in jumping ship. Users seem to be impressed by bitFlyer’s speedy identification verification process, especially compared to competing exchanges.
It was launched by a pair of former Goldman Sachs veterans, Yuzo Kano and Takafumi Komiyama. Among his many accolades, Kano has climbed Mt. Everest to the base camp, which may explain his adventurous spirit in the decentralized world. Other management team members are similarly from the centralized banking and accounting world of Goldman and Ernst & Young. You can get to know Kano better in the below interview with CNBC, though it dates back to 2016 –
They consider themselves a global exchange, and they’re jockeying for position for the world’s No. 1 position by trading volume with the likes of Binance. They posted the following comparison chart on Facebook as an example –
bitFlyer has the wind at its back in this sense, considering that half of world’s bitcoin trading volume occurs in cryptocurrency-friendly Japan. bitFlyer says it controls 70% of the country’s BTC/JPY trading volume. They also claim to control one-quarter of the world’s bitcoin trading volume.
If there’s any complaint on bitFlyer, it appears to surround its name for its FX trading dashboard, Lightning, which could lead to some confusion amid bitcoin’s Lightning network for payments.
But overall, bitFlyer is a model for other exchanges on security and customers service.
· No hacking incidents
· Users boast cheap fees
· Supports bitcoin and Ethereum in the United States. Takes USD wire deposits.
· They launched in the EU only supporting bitcoin, but they intend to expand to other coins, most likely the same ones they offer on the Japanese platform. Offers euro-denominated BTC
· In Japan, they support the following coins: BTC, BCH, ETH, ETC and Japan’s MONA
· Web-based trading platforms including the Dashboard for novice traders and Lightning for more sophisticated traders interested in foreign exchange and margin trading.
· Fast deposits. Users boast of transfers including hardwire transfers showing up in their account within hours.
· Speedy identity verification process
· Supports segwit for transactions
· Launched a yen-denominated Visa prepaid card. It supports bitcoin payments in the mainstream by allowing users to transfer funds from their bitFlyer account to the card and make payments at retailers that take Visa.
· Bank transfers, bitcoin transfers
· Spot trading, margin trading and futures. The top leverage ratio for margin trading is 1:15.
· Trading pairs available with the JPY, EUR and USD
· Web dashboard
· API for traders
· You can create an account with Facebook as well as Yahoo or Google
· High early limits of USD 50,000 upon account verification
· Accepts fiat money
· Seamless and non-glitchy trading experience
· Licensed exchange in Japan, many US states and the EU
· Customer support seems extremely responsive based on social media and user reviews.
· Most reviews are positive
· Backed by venture capital including Digital Currency Group, Mizuho Financial Group and Mitsubishi UFJ Capital, as per Crunch Base.
· Doesn’t support altcoins outside of Japan, except Ethereum with a Trade Class account
· They offer risky leverage amounts of up to 15% the account deposits
· Transactions via the bitcoin Visa prepaid card suffered delays on the blockchain
· Users complain of “ridiculous” spreads that can attach as much as a 20% difference in price
· It appears pairs trading is limited to BTC/JPY, BTC/USD and BTC/EUR
bitFlyer boasts numerous security features, not the least of which include cold-wallet storage for BTC and account verification performed by human beings (not automated.) Yet, there aren’t many complaints about delays in the identity verification process. bitFlyer supports the following-
· Multi-sig for keeping user accounts secure
· Know-your-customer (KYC)
· Anti-money laundering (AML)
· SSL encryption
· “Adoption of DigiCert SSL server certificates”
· “adoption of DigiCert SSL server certificate's highest level” extended validation
· Hash function SHA-2 (SHA-256)
· SSL for “internal communications”
· Strict password requirements
· Account lock function for multiple failed log-in attempts
· “Two-step authentication through mobile phone or device”
The exchange says given bitFlyer’s heightened focus on security, it could result in delays and inconveniences for users.
Even though bitFlyer doesn’t have a blemish on its security scorecard, it’s not that far removed from some of the most severe hacks in the history of cryptocurrencies. Mt. Gox is never too far from the memory of the management team at bitFlyer if only because the hack occurred in Japan, and now Coincheck has only tarnished the country’s security scorecard even more.
But bitFlyer, which is transforming into a global exchange, is using the past as a lesson in what not to let happen.
“The silver lining for an event like Coincheck is that [in the long term], it increases exchange security, which will ultimately benefit the industry,” said bitFlyer’s Chief Operating Officer Bartek Ringwelski quoted in Financial Magnates. You can listen to the podcast in its entirety here –
Meanwhile, as previously mentioned bitFlyer offers 2FA, which is an added layer of security for user accounts on top of a password. They support 2FA via text message, email or with a dedicated app on the member’s mobile device. They recommend using “SMS or an authentication app.”
They support know-your-customer laws, considering that in order to make a deposit into your account, the name on the bank account and the bitFlyer account must be identical.
When bitFlyer received a payment institute license to operate in the EU, they declared that they were the world’s “most compliant virtual currency exchange.”
bitFlyer puts regulatory compliance at the forefront of its operations, as evidenced by the exchange getting the proper licensing wheels in motion in the United States a year ahead of its expansion into the country. They start with the regulatory landscape and the develop their trading platform accordingly. The approach seems to be working for them, given the lack of security breaches at the exchange. bitFlyer executives are also considering some type of self-regulation to protect investor funds even more.
You can watch this interview with bitFlyer’s US COO Bartek Ringwelski on CNN about regulation and the value of bitcoin as a digital asset –
Considering that bitFlyer operates across a trio of continents, fees and commissions vary based on where you live. You can find a rather detailed comparison of the exchange’s fees and commissions here.
The exchange ran zero-trading fee promotions in the EU and the United States. They promise to provide two-week’s notice when fees are set to change. The below table reflects US rates.
Because I’m based in the United States, bitFlyer provided me with US policy –
Transaction limits depend on whether your account is Wallet Class or Trade Class. For instance, Wallet Class has a “seven-day virtual currency withdrawal/payment limit of JPY 100000” and a “seven-day trading limit.” Trade Class, meanwhile, appears to have unlimited seven-day withdrawal/payment and trading limits. You can find more information about the requirements for each account status here.
Begin with entering an email address and then selecting “sign up.” Select an individual or corporate account. You also have the option to choose to open an account through Facebook, Yahoo or Google. It’s an email-driven process, as bitFlyer will send you a confirmation code that you must enter to proceed with the registration. You must then agree to their terms and conditions and indicate if you are not a US resident.
bitFlyer considers the account level at this stage to be “Wallet Class,” which gives you limited access to the trading platform’s features. To begin buying and selling bitcoin, you must increase your status to the Trade Class.
To increase your account status to Trade Class, your personal details must be registered with the exchange to prevent delays. This includes proof of identity, requirements for which vary depending on where you live.
For Japanese residents, it could include but is not limited to the following –
· Driver’s license
· Japan-issued passport
· Personal number card
· Resident card
· Health insurance card/ID
Non-Japanese residents must verify their identity in accordance with the rules in their country, though at the very least they must provide a government-issued idea that meets the exchange’s criteria.
Here is a list of US states where bitFlyer operates.
bitFlyer says users can send BTC in one second via bitWire.
Web-based trading portal offers the following features (though not limited to these)–
· Menu to view profit & loss history as well as transaction reports (deposits, withdrawals and more)
· Charting with details such as opening and closing prices as well as a volatility indicator. Charts are interactive, so you can tailor them to customize the time periods, etc.
· Order book with a history of ask, bids, price, order amounts, etc.
· Limit orders, market orders and special orders are available.
· View all orders that have been traded in a given market
· Open order status
· Real-time chat function available for traders to interact with one another, ask questions, etc.
Lightning FX in bitFlyer’s foreign exchange trading platform. To use it, traders must upgrade their account to the class level that matches this platform.
This is where traders can use more sophisticated strategies with bitcoin such as margin trading. This ups the ante both in terms of risk and possible reward, as you can add layers of debt to the trade. It gives traders the ability to profit whether the volatile bitcoin price is rising or falling.
Traders can add as much as 15-times leverage on top of their deposited amount. The exchange explains: “15x leverage means that if, for example, you have a margin deposit of 100,000 JPY, you can trade with the value of 1,500,000 JPY.”
But you don’t have to trade that much, as there’s hardly any minimum deposit. The least you can have in your account to trade BTC on margin is 0.001 BTC. They support stop-loss and take-profit orders.
Given the volatility in the bitcoin price, bitFlyer advises investors to trade on margin.
bitFlyer charges zero commissions for margin trades on Lightning, as of Q1 2018.
The exchange boasts partnerships such as API integration with Japan’s Sumitomo Mitsui Banking Corp.
The US mobile app has garnered mixed reviews, with a 3.6 star rating out of 5 stars. Users are requesting new features on the mobile app such as candle charts. One user complained of having a withdrawal stuck following a quick deposit, which interfered with their ability to trade.
As for security on the mobile app, one user posted the following complaint: “There's a bug. You set to require a fingerprint, but you can bypass it by simply clicking 'login' and pressing back. Lack of security.” On a less severe scale, one user complained that the “push notifications” were not in English language.
bitFlyer members appear anxious for the exchange to add more altcoins, but who wouldn’t be? Aside from that, bitFlyer is a refreshing exchange in that many of the reviews about the company are positive. It’s rare to hear about traders who are pleased with the speed at which their funds are deposited into an account and also with the ease at which they can trade on the web portal.
For instance, the following Reddit user compared the hours it took for identity verification versus months at competing exchanges –
If you’re interested in trading bitcoin, either in spot trading or against the JPY, EUR or USD, you really can’t seem to go wrong with bitFlyer. And if you are interested in trading bitcoin on margin, bitFlyer can accommodate that too, even offering debt options so you can raise the stakes.
bitFlyer shines among its peers on security, and its fees remain competitive, especially with its expansion into the EU and the United States. Even though they’re new to these markets, they’re not a newcomer on the block, as evidenced by their history since 2014. So, traders can feel confident that bitFlyer has a history behind it. If you’re looking for fast deposits, a smooth-sailing trading experience and support, bitFlyer should meet all your needs.
bitFlyer support can be reached at [email protected].