When it comes to cryptocurrency exchanges there are several different types. Spot exchanges, derivative exchanges and buying platforms. Spot exchanges are the most common and they're the platform that most people think of when they're talking about an "exchange." On a spot exchange you can trade one crypto asset for another, like Bitcoin for Ethereum.
A derivatives exchange offers products like futures or options. These allow traders and investors to bet on future prices. Derivatives exchanges also commonly have leverage which allows crypto traders to use margin to take out a larger position. The most famous crypto derivatives exchanges is Bitmex which offers up to 100x leverage.
Then there are the buying platforms, also known as onboarding platforms, which is where Coinmama comes in. On Coinmama it's not possible to trade cryptocurrencies or to trade crypto derivatives like Bitcoin futures. Instead, Coin mama is a buying platform which enables traders and investors to purchase cryptocurrencies like Bitcoin and Ethereum.
In this Coinmama review we'll cover how Coinmama works, who can use it, what the Coinmama fees are and everything else you'll need to know in order to get started using their service. Let's start off with an overview of the platform.
How Do I Use Coinmama?
The first thing that any Coinmama review should cover is who can actually use the platform. Like almost every other cryptocurrency exchange, there are regulations about who can access the platform. For Coinmama especially the rules are fairly complex.
First off, since Coinmama is meant mostly for Europeans the platform can be accessed by anyone in Europe, except for residents of Crimea. Coinmama is also available to residents of the United States with a few exceptions. Traders from the following states may not use Coinmama:
- New Mexico
Also, traders from the following countries may not use Coinmama:
- South Sudan
- North Korea
- Palestinian Territories
Here is where it gets interesting though. Coinmama also allows a few other jurisdictions to use their service except that the transaction happens through a third party. So a trader goes to the Coinmama website and enters the purchase order, but the actual clearing of the trade is handed by a third party.
The following countries can use Coinmama via this third party service:
Third party service is also available for certain US states:
- New York
- District of Columbia
More information about restricted states and nations is available here.
Buy Bitcoin and Other Cryptocurrencies
While it's easy to buy Bitcoin on Coinmama they don't offer support for very many other cryptocurrencies. On Coinmama you can buy Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Ripple XRP, Cardano, Litecoin and QTUM.
Coinmama charges a commission each time someone uses their platform to buy Bitcoin or any other cryptocurrency. They charge a variable commission fee that can be as high as 3.9%. In addition, Coinmama also marks up the market rate by 2% before the sale.
For example, if someone wants to buy Bitcoin and BTC is currently trading at $10,000 then the market rate for the sale on Coinmama will be $10,200. This markup serves two purposes. First, it allows Coinmama to make a higher profit on each purchase. Second, it protects Coinmama against volatility. For instance, as this article was being written Bitcoin appreciated in price by more than 10% in about 1 hour. That's an incredible move and Coinmama's 2% markup tries to protect the platform against sudden volatility.
Credit Card Purchases
Not all cryptocurrency platforms support credit cards or the use of a debit card but Coinmama does. They allow their traders and investors to buy Bitcoin or any other currency with a credit card or debit card at any time. All credit card purchases incur a 5% commission which is fairly typical and certainly a lower commission than some other platforms.
For anyone who wants to use a credit card or debit card to buy Bitcoin there is a full guide available on Coinmama's website.
Besides the use of credit cards, Coinmama also lets traders and investors buy Bitcoin with a SEPA bank account transfer. The disadvantage of a bank transfer however is that if you use it to buy Bitcoin the purchase price is not locked in until the transfer completes. That means that if it takes a day or two for the transfer to clear then the price of Bitcoin may have changed by then.
One of the great things about Coinmama though is that they support a bunch of different currencies which makes them a good choice for European traders. Currencies supported by Coinmama include GBP, CAD, EUR, USD and AUD.
Selling on Coinmama
While it is possible to sell on Coinmama the platform is not designed for sales outside of Europe. It's only possible to receive a payout via a SEPA bank transfer which means Americans, Canadians and Australians cannot sell on the platform. A better choice for investors who want to sell Bitcoin or any other crypto is Coinbase.
Coinmama KYC Verification
Coinmama does indeed have a KYC verification program that investors will need to complete before they can purchase cryptocurrencies on their platform.
Some people have asked about the Coinmama verification time. The good news is that Coinmama claims that their verification process can be completed in as little as 15 minutes!
Does Coinmama require ID?
Yes, Coinmama does require a valid government issued ID in order to purchase cryptocurrencies on their platform. That ID can either be a passport or a state issued driver's license or other national or state identity card.
KYC & Buying Limits
In our Coinmama review we think it's important to address the fact that Coinmama has different KYC verification levels which will affect how much cryptocurrency you can buy on a daily basis, as well as how much you can buy in total.
What we'll do here is to show how much crypto you can buy at the various KYC levels. If you want to know what documents are required to achieve each KYC verification level you can check Coinmama's website.
- Level 1 - Lifetime spending limit of $15,000. Credit card daily limit of $5,000 and banking limit of $12,000
- Level 2 - Lifetime spending limit of $50,000. Credit card daily limit of $5,000 and banking limit of $30,000
- Level 3 - Lifetime spending limit of $1,000,000. Credit card daily limit of $7,500 and banking limit of $30,000
Most traders will only ever need to get verified for level 1 and that level requires the least personal information. It's also worth noting that Coinmama does have a minimum purchase requirement of $50 per order.
Is Coinmama a Legit Site?
Even though Coinmama doesn't have a big name like Binance or Coinbase, it is nonetheless a legit cryptocurrency buying platform. Traders and investors ask: is Coinmama safe, and the answer is definitely yes.
Coinmama's Security Record
While Coinmama has never actually been affected by a hack that led to a loss of cryptocurrency, they have been hacked. Early in 2019 an attacker was able to make off with about 450,000 email addresses and passwords from the exchange, some of which eventually turned up on the dark web.
Interestingly, Coinmama was not the only website affected by this hack. Altogether 24 companies were affected and more than half a billion personal records were stolen.
Although they were hacked there is one big consideration when looking at Coinmama: they're a non-custodial exchange. That is, traders and investors cannot store cryptocurrency on the Coinmama platform. When you buy Ethereum or any other crypto on Coinmama, using any one of their various payment methods, you have to supply a crypto address. As soon as the payment method clears the money automatically gets sent to that address.
Coinmama forces you to keep your coins off the platform which dramatically reduces the likelihood of losing coins to a hack. If you also use another platform like Binance it's equally important to withdraw your crypto from the exchange and store it somewhere safe. A hardware wallet like a Ledger or Trezor is always a great choice.
Customer service for Coinmama consists mainly of a support email address. If you have any problems you can email Coinmama and wait for a response. You can find out more about Coinmama's customer service on this page.
Also, you can find many customer support topics already documented in the Coinmama help section.
Coinmama Loyalty Program
Coinmama has a great loyalty program which is designed to reward all of those traders and investors who use the platform regularly. Although Coinmama limits how much crypto everyone can buy the limits are quite high and getting rewarded for purchasing Bitcoin is a good deal.
With the Coinmama loyalty program everyone is automatically enrolled, you don't have to sign up for anything. Currently there are three levels to the loyalty program that we'll talk about in this Coinmama review.
- Crypto curious level - This is the base level that all Coinmama traders are automatically enrolled in. There are no loyalty rewards at this level.
- Crypto enthusiast level - This is for any trader who purchases more than $5,000 worth of crypto in any given 90 day period. The reward is a 12.5% reduction in fees.
- Crypto believer - The highest level of the Coinmama loyalty program. At this level there is a 25% reduction in Coinmama purchase fees. In order to qualify you must purchase more than $18,000 worth of crypto in any given 90 day period.
What's cool about the Coinmama loyalty program is that everyone is automatically enrolled and you don't have to purchase anything to get involved. For instance, some other exchanges offer discounts on trading fees but in order to qualify for the discount you first must purchase some of their exchange token.
Coinmama Affiliate Program
Do you know anyone who might be interested in buying some crypto? If so you might be able to benefit from the Coinmama affiliate program. By referring a new user to Coinmama you can receive a commission on all of their purchases.
As of publication the affiliate program reward rate is 15% of Coinmama's commission. That means that if a new trader uses a debit card, or any other payment methods, to buy $1,000 worth of Bitcoin then you will get $8.25. Here's how that works. The Coinmama commission on a $1,000 sale is $55 and 15% of that commission goes to the affiliate. 15% of $55 is $8.25.
If you'd like to find out more about Coinmama's affiliate program you can check their website.
Switching to Coinmama
In this Coinmama review we've explained how to buy on Coinmama which is really the main topic to cover as Coinmama doesn't actually allow investors to exchange coins on its platform. If you already have crypto and you want to trade it you might want to consider another exchange like Binance, Coinbase or Kraken. For crypto derivatives, FTX and Bybit are both popular choices. (read our FTX review here, and our Bybit review here)
Coinmama is really designed for international users who wants a fast and hassle-free way to purchase cryptocurrency. Since they accept bank transfer, credit cards and debit cards as a payment method Coinmama is a versatile platform that doesn't hold you back. The Coinmama customer support department is also quick to respond in the event of a trading problem.
While Coinmama does support a number of payment methods the one thing we'd like to see more of is a higher number of cryptocurrencies available for trade on their platform. Hopefully in the future Coinmama will include more coins so that traders have more options to choose from.
Altogether Coinmama is a reliable, established exchange and definitely one of the better platforms for the purchase of crypto.