Coinmama Review 2021 - Is It Safe?
Coinmama is a platform providing users with an opportunity to quickly buy cryptocurrencies with a credit card, Apple Pay, or via wire transfer. The registration doesn't take much time and the interface is quite intuitive. Coinmama isn't suited well for regular trading as the fees on the platform are quite high. So basically, Coinmama is good for buying cryptocurrencies for the first time. In this article, we will answer the most vital questions concerning the use of the service: is it safe to use Coinmama? Is Coinmama a scam? What are the fees on the platform? What are the main features of the platform? What is needed to sign up for Coinmama? And others...
The platform was founded in 2013 in Israel. A team of fewer than 50 employees works on the platform that was used by 2.5 million throughout the years. According to the Coinmama website, one of the prime goals of the company is making the purchase of BTC easy and transparent from any place in the world. The service can be used in 197 countries and is not available in North Korea, Cuba, Israel, Iran, Syria, and several other countries. Coinmama can be used in all states of America with the exception of Connecticut, Florida, Hawaii, Iowa, New Mexico, New York, Oregon, Virginia, and Vermont. Now the company is headquartered in Ireland.
Kudos to #Paypal for joining us in the financial revolution. Watch Sagi Bakshi, Coinmama's CEO decrypt the road to mass adoption on i24.https://t.co/fX5grDLi5b— Coinmama (@coinmama) October 22, 2020
.#Mainstream #Massadoption #MarketMaturity #bitcoin #cryptocurrency #cryptocurrencynews
Thank you @SaWilliamson9 @i24
Coinmama suggests that the future of money is digital currencies controlled by the owners without the need for an intermediary. Worth saying, that yet the architecture of Coinmama doesn't match this ideology as it's a centralized platform that holds the brokers' money. Probably the Coinmama team sees the service as a stopgap measure. Who knows?
It's important to grasp the difference between the companies like Coinmama and crypto exchanges (e.g. HitBTC, Kraken, etc) as Coinmama is an exchange broker, not an exchange. Exchanges are busy matching the buying and selling orders of traders while crypto brokerage services provide users with an opportunity to buy cryptocurrencies and pay in fiat money.
Coinmama supports 10 cryptocurrencies (however, it's understood that the list will keep growing). The coins are Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Cardano (ADA), EOS (EOS), Ethereum Classic (ETC), Qtum (QTUM), and Tezos (XTZ). The platform accepts Mastercard and Visa credit and debit cards. SEPA, SWIFT, FasterPayments, Sofort, and Fedwire transfers are also available for buyers. Another option is Apple Pay. The website warns that currently American Express, Discover, and PayPal are not accepted on Coinmama. The prices are displayed in 5 fiat currencies: American dollar, Euro, Great Britain pound, Japanese Yen, Canadian dollar, and Australian dollar.
How to Use Coinmama?
The first step is creating an account. However, the registration has several stages. The first stage is providing an email address, creating a password, and providing a country of residence. The next stage is verification. This stage requires to provide a government-issued ID and personal data including first and last names, date of birth, and sex. After filling this info in, the user is required to provide more data including the country name (yes, one more time), the state, the city name, the address, and a phone number. The final stage requires the upload of the photos of the documents and the insertion of the ID-number. There should be photos of both sides of the IDs. Besides that, a user must upload a selfie. As all this info is sent, the Coinmama team will check the data, and register an account if everything is fine.
As the registration is finished and the user can start buying crypto. The limit is spending $15,000 a day. Such a limitation is quite democratic if compared to the limits on similar platforms. To buy some BTC one needs to click on the tab of the same name, insert the desired amount of BTC, and put the Bitcoin wallet address in the respective section. Transactions usually take up to a few minutes.
Besides buying cryptocurrencies, Coinmama provides an option to sell BTC, too. It can be a nice opportunity for those who wish to sell their coins quickly and without dealing with any hassle of withdrawing money from the exchange, and so on. Those who got registered on Coinamama and passed the account verification can sell crypto on this platform really quickly. The fiat money is sent to the user's bank account via transfer.
To sell Bitcoin on Coinmama the user should have access to her/his bank account and be able to provide a BTC wallet address. The user should sign in or register an account and tap on the Sell button in the menu in the upper section of the website. The user is free to choose between inserting the amount of BTC she/he is going to sell or inserting the amount of USD (or other fiat currency) she/he wants to receive in exchange for Bitcoin. The next step is providing the bank account info, the country, personal data, and so on. As all details are provided, the user gets a BTC address to send her/his crypto to. The address will be available in the form of text and in a form of the QR code. The user must send the exact amount of BTC to this address. When the coins will hit the Coinmama address, the company will send the respective amount of money to the user's bank account. The bank information and personal data of users are not stored by Coinmama hence this information cannot be compromised or used in harmful ways.
Users don't have to perform any extra actions to initiate a loyalty program as the program starts automatically as the user starts to buy or sell crypto on Coinmama. The program is aimed at incentivizing users to buy and sell more often.
There are three levels in the Coinmama loyalty program:
Crypto Curious. This level is the zero point which doesn't provide any bonuses. As long as the user is on the Crypto Curious level she/he trades without saving any money.
Crypto Enthusiast. This level is reached as soon as the user spends five thousand US dollars in 90 days. Crypto Enthusiasts save 12.5% of fees charged by the platform. Another benefit is fast-track support.
Crypto Believer. That's the highest level in the Loyalty Levels hierarchy. The level is achieved by those who are selling or buying on the platform for at least 30 days. The minimum amount spent in 90 days required for the Crypto Believer level is $18,000. Another option is spending $50,000 regardless of how much time it took. So eventually any user spending dozens of thousands of USD on Coinmama gets the Crypto Believer level. This level provides queueless support assistance and a 25% fee discount. Considering how high the fees on Coinmama are, this bonus is a nice feature.
In general, the loyalty program on Coinmama is really clear and simple to grasp. Users don't have to do any extra actions to get discounts. The fees decrease naturally as users sell and buy coins on the platform.
Just like any other cryptocurrency-related platform, Coinmama provides an affiliate program. The way it works is quite standard. The user gets a personal affiliate link and spread it. Those who register on Coinmama using this link become the user's affiliates and the user receives rewards for each transaction made by these people. The earning size is 15% of Coinmama's commission. If we use absolute numbers, it means that every time an affiliate spends $1,000, the user who signed her/him earns $8.25. The payouts are sent once a month. It's important to bear in mind that the rewards are not paid until three different users will make at least three transfers on Coinmama. This limitation incentivizes users to bring more affiliates.
The fees on Coinmama are higher than on the regular crypto exchanges. However, it's important to realize that on exchanges users pay per trade and withdrawal and certain exchanges charge fees for deposits. On Coinmama users pay only once per exchange. In some sense, they pay all three types of fees at once. It's safe to say that Coinmama fees are high anyway. Using SEPA transfers for buy transactions costs 3.9% per transaction. Sell transactions are much cheaper as they cost "only" 0.9%. SWIFT transactions have a minimum fee as high as £20 it's relevant only for orders not exceeding $1000. Using a credit or debit card costs 5% (referred to as "momentum fee" on the Coinmama website). Coinbase, a platform with similar functionality, fees are a bit lower and depend on the payment method stronger.
Safety: Is Coinmama Safe To Use?
Many cryptocurrency platforms are not trusted by people as there were many cases when exchanges were turning out to be exit scams, disappearing with the users' funds after a long period of seemingly decent service. Other services were too weak and ended up hacked with the funds stolen. So, before one starts to use any crypto platform she/he should read about the company first and figure out if the company is shady and if there are frequent comprehend complaints from the users online that were not addressed by the customer service. If you don't see that company takes the criticism and queries seriously, then it's a red flag.
So is Coinmama a scam? Is it safe to use this platform? On Trustpilot, there are several stories of people whose money was allegedly held by Coinmama without a good reason. For instance, some payments were accepted by the platform but the crypto never arrived in the wallet of the user. The refund was promised but the user claims he still didn't receive his money back. We don't know if this story is true but such accounts are quite disturbing as it seems that you never know when your money will be stuck on the platform. Some users claim they received their satoshis after several days of waiting and pressing the support team instead of several minutes without any hassle as it was supposed to. Even if the money ends up in the users' wallet with the delay, it's not very nice as the prices on crypto are growing quickly, and losing the right moment can draw serious losses. Most users with negative feedback admit that before facing troubles on Coinmama they all had a number of successful transactions on the platform. More than that, there is not much criticism of Coinmama's service online. It means that in most cases the platform and its support team function well.
The thing that had raised our concern is that the company claims that it doesn't store the users' data, we have found a contradictory statement left by the company representative on the Trustpilot website. Answering one of the negative posts, the Coinmama account admitted that the company stores the user data encrypted on the server. That's not a bad thing but the fact that the company contradicts itself is frustrating. All in all, it seems that Coinmama is rather a legit company that needs to improve their service. The fact that it doesn't hold users' assets makes it safer than custodial exchanges that can be hacked and lose the customers' money as a result.
High fees and transaction delays make trading here a HELL. I DO NOT RECOMMEND TO USE THIS PLATFORM UNTIL YOU ARE SOME KIND OF A MASOCHIST