Security Compliance
Coinbase uses its own digital wallet for storing your cryptocurrency.
Coinbase keeps 98% of its cryptocurrency in cold storage. This makes it hard for thieves to steal crypto assets if the exchange is hacked. Cold storage is the most secure way to store cryptocurrency, so the fact that Coinbase does this is a huge plus.
BitMEX is stating that it utilizes cold storage for all of the bitcoin funds. BitMEX also uses multi-signatures wallets and every bitcoin withdrawal is audited by hand by at least two BitMEX employees. All bitcoin deposit addresses sent by BitMEX are externally verified to ensure the keys match those of the founders. If they do not match, BitMEX will shut down and halt trading.
Both Coinbase and BitMEX prioritize user security. Coinbase, a regulated public company, holds 98% of assets in cold storage, employs wallet encryption, and has a mandatory two-factor authentication. BitMEX, on the other hand, employs multi-signature deposits and withdrawal schemes with all storage kept offline. They also utilize Amazon Web Services for extra security and have managed to avoid major security breaches since their inception in 2014.
Regulatory Compliance
Coinbase is a US-based cryptocurrency exchange, however, no restrictions for Canadians. Canadian residents can use Coinbase to their full capacity.
BitMEX withdrew operations in Ontario, but was not officially named by the OSC. BitMEX is still operational in other Canadian provinces but it is facing legal trouble with the USA due to allegedly offering securities trading illegally.
While you can use BitMEX safely, trade at your own risk and be aware that they could cease trading in Canada due to regulations.
Coinbase, registered as a Money Services Business with FinCEN, operates in Canada, ensuring safety for Canadian users. However, BitMEX faces limitations in Canada. BitMEX discontinued its services in Ontario and Quebec due to new regulatory frameworks. Users in other parts of Canada can access BitMEX but must adhere to local laws and regulations.
Customer support
Coinbase customer support is very slow. It took them 4 days to address our request to a real person. Even though they offer 24/7 support and a live chat option, the quality of the support is bad due to a very high volume.
BitMEX offers support via a contact form on their website and has a detailed FAQ section as well.
Coinbase offers live chat, email, and 24/7 phone support. However, its customer service quality has faced criticism, with many users experiencing delays in verification and withdrawals, and lack of response to support tickets. BitMEX offers customer support via email and a ticketing system. While response times can vary, user feedback is generally satisfactory.
Conclusion
While both Coinbase and BitMEX have their merits and cater to different user preferences, for Canadian users, Coinbase emerges as the more preferable platform. This is due to its straightforward interface suitable for beginners, strong security measures, full compliance with Canadian regulations, and the availability of multiple support channels. However, Coinbase should focus on improving its customer service, a critical factor for users dealing with financial assets.
When comparing Coinbase to BitMEX, it's worth noting that Coinbase One introduces several new features that make it more competitive. These include zero trading fees, boosted rewards, and priority customer support. Additionally, the platform has increased its focus on staking, allowing users to earn rewards, such as 5.10% APY on USDC. While Coinbase’s fees remain high outside of Coinbase One, these added benefits can make the platform more attractive for users looking to maximize earnings while minimizing transaction costs, especially compared to exchanges with lower fees but fewer reward opportunities.
We recommend choosing Coinbase over BitMEX for your cryptocurrency trading needs. By opting for Coinbase through our referral link, you support us in conducting comprehensive independent analyses of crypto trading options for Canadians.
If you find that neither Coinbase nor BitMEX meets your requirements, we encourage you to explore our monthly-updated list of the best exchanges for Canadians to trade crypto. This list provides a range of alternative options that may better suit your specific needs and preferences.
