- Editor Rating
- Rated 2.5 stars
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- TradesEditor: 51%
- FundingEditor: 45%
- ComplianceEditor: 23%
- PlatformEditor: 72%
- Help & SupportEditor: 64%
Shanghai based Bitcoin exchange LakeBTC was launched in March 2013, and is owned by Lake Investments Limited registered on the British Virgin Islands.
LakeBTC does not support any other digital currencies besides Bitcoin, which is one of the first notable weaknesses. The fiat markets are also limited, as Bitcoins can only be exchanged for US dollars or Chinese renminbi. Despite the focus, the bid-ask spread is still relatively big at around 40 basis points for BTC/USD. For CNY/USD the bid-ask spread is better, at a decent 25 basis points. Trade execution fees add another 20 basis points in costs on bought coins, while selling is subject to a reduced fee of 15 basis points (which decreases based on volume).
Another disadvantage is that users do not get much control over their trades, as the only available order type is a limit order. Market orders and advanced order types such as stop-loss orders are not available. More importantly, margin/short trading is currently not supported by the exchange.
One way for international customers to fund their fiat balances is via expensive ($15 to $65 per transaction) and slow wire transfers. Wire transfers may take several days to be processed, making it less than ideal to react on investment opportunities. The funding options are a bit better for Chinese and Swedish users, as these can fund their account via bank (SEPA) transfers. These transaction types are quite a bit cheaper than wire transfers, although the speed is not great either.
LakeBTC acknowledged these drawbacks, and tried improve funding options by becoming a Gateway Member of the International Ripple Gateway Association (IRBA). This allows users of the Ripple network to make a deposit to their local gateway, which can subsequently be transferred to LakeBTC at a high speed and at low costs. This, however, still requires sending funds to a local gateway first. Currently, the latter means that European and American users will have to make use of the SnapSwap Ripple gateway. SnapSwap makes Instant Deposits available for the U.S., but these are very limited in size. Other methods still involve slow bank transfers. Payment methods such as PayPal, Dwolla and debit/credit cards are not accepted. Altogether, making use of the Ripple network would thus seem like a good step, but it is not very effective in reducing total transaction times at the moment.3
Even though it is beyond doubt that LakeBTC is a Chinese exchange, it was not possible to confirm a business registration in China or on the British Virgin Islands (BVI). Lake Investments Limited owns LakeBTC and is said to be registered on the BVI, but this concerns a tax haven without a searchable business registry. The Financial Services Commission does provide a searchable registry, but Lake Investments could not be found. Hence it can be concluded that at least it is not registered as a financial service, which does seem a bit odd. Whatever the case, registering at a place that provides secrecy and a high level of intransparency leaves very little confidence in the compliance quality of the exchange. Despite being active for almost two years, the exchange did not even provide a public proof of reserves after the collapse of Mt.Gox. In terms of compliance, LakeBTC leaves a lot to be desired.
One advantage of limited functionalities is that it makes it a lot easier to achieve great simplicity on the trading platform. LakeBTC has certainly succeeded to do so, and also the design is very minimal. The website is responsive, but there is optimized mobile app. There is, however, an in-browser (cross platform) trading tool that partially compensates for the previous. The tool, called LakeTrader, will appeal to traders looking to do technical analysis and “one-click” trading. Furthermore, all accounts can be secured with two-factor authentication.
Help & Support
For Mandarin speaking users, the available support is excellent as they can simply make a phone call to the support desk. Unfortunately, international customers will have to send an email to request support. The good news is that there is a rather extensive English guide that will answer most questions, although it does not have much educational value and could have included more attention for risks involved when trading Bitcoins. There is a note on this, but it could easily be overlooked on the page’s footer.