As we’ve gotten deeper into the world of cryptocurrency exchange reviews, one thing has become clear: for every 1 legitimate crypto exchange there are 3 shady exchanges which may just be in it to steal your money. WEX exchange hasn’t had a major scandal yet, but it is simply a rebrand of another exchange (BTC-E), which was taken down by the US government and fined $110 million.
WEX’s suspicious characteristics don’t stop there. The company claims to be based in Singapore, but seems to have much deeper ties to Russia. The platform itself demonstrates a lack of security in important areas, and the interface lacks the polish and finesse of a cryptocurrency exchange worth trying.
We’ll cover all this and more in the WEX review to come, but in general we recommend that you use qualified alternatives like eToro, which are built for beginners and professionals alike, without the threat of fraud and theft.
What is WEX Exchange?
WEX has been around since 2017. Reportedly based in Singapore, WEX is a slight rebrand of BTC-E, the now-defunct cryptocurrency exchange which got itself in so much trouble with the United States government.
BTC-E’s sin was performing financial transactions on United States soil – transactions which might have been used to launder money or commit other crimes within the US. BTC-E was penalized more than $100 million, and appeared to close its digital doors.
Close their digital doors, that is, until WEX.nz appeared in its place. Many of WEX’s users migrated straight over to the new platform as if nothing had ever happened. WEX is still in operation today, but the network often suffers downtime. During these periods of inactivity, WEX’s American customers have been known to take to the internet with their complaints, in a panic that a WEX exit scam might finally be in process.
In regular use, WEX’s interface is a clunky grey-on-white design mishap that recalls Windows 95-era platforms. The site also displays your password in plain text during login (though they also provide 2FA), which is a definite no-no from a basic web security standpoint. Finally, WEX doesn’t accept fiat transactions through credit card. Instead, they only take the less secure and more costly bank transfers that take days to complete. All in all, this just isn’t a place that this writer would want to put his money.
That’s the bad, but there’s good to note with WEX as well. The company accepts fiat payments for various cryptocurrencies (Bitcoin, Litecoin, Namecoin, Ether, Dash, Novacoin, Bitcoin Cash, Peercoin and Zcash) in Russian Rubles, US Dollars, and EU Euros. Fiat exchanges are still not hugely commonplace, and those that exist don’t always allow their users to choose from as many currencies as the 9 we just mentioned.
WEX has its own utility token, much like Binance Coin or Kucoin. WEX also has a mobile app, which is a bare bones rebrand of the former BTC-E app. WEX also offers “Bitcoin Betting”, which is essentially just binary options gambling that you tend to find on the internet’s sketchier investment platforms, but for crypto. This last point is not a sign that WEX is corrupt, but it’s certainly not a characteristic that screams legitimacy.
To sum up, WEX is a crypto exchange with a dubious past that nonetheless accepts fiat payments and has its own utility token. Despite the couple of marks in its favor, we can’t in good conscience recommend WEX to anyone. Instead, we’ll tell you about eToro, which allows users to profit from Bitcoin and other cryptocurrencies, without the risk of fraud or loss-of-funds.
Why is eToro a Good Alternative to WEX?
WEX is what we might call in the States a “fly by night organization”. WEX’s hasty rebrand scarcely hides the fact that the company recently went majorly afoul of the US government. Their obvious focus on the Russian crypto market (despite their claiming to be a Singapore company) is a further indication that this company is, at the very least, operating outside the boundaries of conventional financial regulation.
That’s not what you want when you’re risking your hard-earned money. The very last thing a crypto investor should do is give their banking information to a company like WEX, which seems to exist on the very borders of the law. While it might be tempting for users to use the company for their fiat services (though not WEX Mastercard, for you credit card customers), the risks are simply too great.
In contrast to WEX’s outlaw status, eToro is a fully regulated financial entity that has been in operation for years (not like WEX’s 2017 origin). eToro has only recently gotten into the crypto game, offering CFDs (contracts for difference) based on the price action of the world’s most popular cryptocurrencies (NEO, Bitcoin, Ethereum, EOS, etc.). Here are some of the reasons we love eToro, and often recommend it to beginners so they don’t get pulled into sketchy exchanges like WEX.
- eToro doesn’t make you store your own crypto. eToro doesn’t “sell” cryptocurrency. They sell CFDs, which give you all of the profit and loss opportunity of traditional ownership, but without wallets, addresses, private keys, or conventional exchange costs. You can still buy and sell when you want, and the money you’ll walk away with is exactly the same as if you were to have bought crypto on an exchange like Coinbase.
- eToro has a crazy-simple user interface. Compare this to the confusion of the WEX trading screen and you’ll quickly see on which platform you’ll actually want to spend your time and money.
- eToro is fully government regulated. They’ve also been in operation long enough to test the quality of their service, as it pertains to global regulations. eToro has been around since 2006 – before the age of cryptocurrency. They don’t offer their services where they’re not allowed (which is what got WEX into so much trouble), and are as such not available for US traders. Nonetheless, this is a mark in favor of eToro because it at least proves that they are legit.
How to Notice Fraudulent Exchanges Before You Lose Your Money
As we noted above, there are plenty of fraudulent exchanges in the cryptocurrency market of 2018. This is because crypto is constantly being flooded with funds from the outside world. All kinds of people (investors, honest exchange owners, dishonest exchange owners) all want a piece of this action, and that’s why there are so many choices when it comes to exchanges.
However, as we’re learning by reviewing all of these exchanges one by one, this means that many of these exchanges are started by people who, at best, don’t know what they’re doing and endanger investors, and at worst want to steal as much money from as many people as possible.
No one is accusing WEX of outright theft, yet – at least that’s not what we’re seeing. But WEX does have all of the earmarks of an exchange that could disappear at any moment – and in fact, their frequent downtime issues make WEX users constantly wonder if “This is it”.
No exchange experience should be this way, but crypto users are partially primed for these experiences, in large part because of the widespread failure of popular exchange at the end of 2017.
To recap what happened way back then, so many new users were flooding into the crypto markets that exchanges like Bittrex and Kraken simply couldn’t keep up. Sometimes they went down, often they suspended new trading, and frequently they disallowed withdrawals of various digital assets, much to the chagrin of their users.
However, none of these exchanges were sketchy to begin with. These were high quality services that simply got overwhelmed with new adoption that was simply impossible to anticipate. They went to work hard on their digital infrastructure, and before long were back in business. Even world leading Binance had these problems, but quickly fixed them and grew into something even bigger and better.
Exchanges like WIX were never high quality exchanges. Even if their problems are due to overwhelming adoption, users can’t hold out hope that the services will greatly improve, simply because they were never very good in the first place. Here are some other earmarks of fraudulent or untrustworthy exchanges:
- Look for exchanges that are attractively designed and easy to use. Many people complain about Coinbase’s fees and various controversies, but at least when you use Coinbase you know you’re using a quality platform simply because of how well it is designed. The same goes for Coinbase’s sister exchange, GDAX, and numerous competitors like Binance, Bittrex, and Kraken. WEX looks like it was designed without an awareness of the design standards of contemporary cryptocurrency exchanges.
- Read independent reviews and user comments. Many crypto exchanges pay reviewers with influence for good reviews, despite the actual performance of the platform under consideration. However, many influential reviewers are honest. Try to find reviewers who seem trustworthy, then measure their analysis against the comments of real platform users, found on forums like Bitcointalk and Reddit.
- Use crypto exchanges with high security and regulation compliance. WEX may allow users to use the site without identifying themselves, but this is part of the behavior that got them in trouble with US regulators. Furthermore, without identifying yourself, you’ll have little to no recourse in the event that your funds are stolen, lost, or otherwise misappropriated. Security can seem like a drag, but it’s in your best interest to go with an exchange that uses it.
- Use crypto exchanges which seem to have a reason for listing the currencies on their platform. Exchanges like Yobit include any coin under the sun, no matter if it is inactive or clearly scammy. Good exchanges choose to associate only with high quality crypto projects. In this way, WEX doesn’t do so bad, but you should still be on the look out when considering any new platform.
- Use crypto exchanges which have solid customer service. One of the most common complaints about WEX is that their customer service basically does not exist. In some cases, even responsive customer service can be a sign of bad practices. Sometimes users lost funds, only to have customer service run them around without ever resolving the issue.
Crypto exchanges move a great deal of money through the industry. You should know how to find frauds before you risk your own money to sketchy actors in this high energy industry.
Final Thoughts on WEX Exchange
WEX exchange offers some good features on the surface (fiat purchases, mostly), but is otherwise a clunky and problematic exchange with a shady past. It’s unclear how effectively WEX will even be able to operate given the $110 fine it got hit with in its previous form (BTC-E) just last year.
WEX’s primitive interface does not give today’s users confidence that WEX’s designers, owners, and management have the skill or awareness to craft and maintain a modern cryptocurrency exchange. Looks aren’t everything, but when the surface is this clumsy, we can only wonder at what lies beneath.
Furthermore, WEX has a suspicious relationship with its apparent headquarter nation (Singapore), which seeming to do most of its business within Russia. Without transparency coming from WEX, we don’t really know who’s behind this exchange. For all of these reasons and more we advise our readers to stay well away.
We sincerely hope that WEX’s scandal days are behind it and that the exchange grows into a model of how well an exchange like this can work. For the most part, WEX’s problems have not been directly user-facing, but users are right to be cautious of WEX’s missteps in the professional and regulatory worlds. Crypto is only getting more popular and exchanges tend to either improve or get squeezed out. Which way will WEX exchange go?