Coinmama Review – Pitfalls to Know Before Trading

We’ve outlined some of the key pros and cons of Coinmama:

The platform is straightforward: it doesn’t offer a lot of bells and whistles. You can buy crypto with fiat currency and then convert crypto back to fiat. That is about it.

You can set up a self-custody wallet, which means you are in full control of your crypto at all times. Some people prefer a wallet hosted by the exchange (which is not offered by Coinmama) because then they don’t need to remember login phrases. However, self-custody wallets are more secure.

Coinmama has excellent customer support, something that is virtually non-existent on most other crypto exchanges. They also use encryption for all data transfers, making the trading process very secure. The downside is that Coinmama has very high fees – the highest I have seen.

This issue is compounded by the poor prices. Since Coinmama doesn’t let you trade with others, when you buy or sell you’re buying or selling from Coinmama… And they don’t always give you the best price. Between high fees and poor prices, Coinmama could be reducing the amount you get/receive by 5% or more.

The cryptocurrencies you can trade, and the fiat currencies you can use to buy them, are also limited. I’ll dig into all these points in more detail below.

Fees range from 0.99% to 3.9% when using Coinmama, depending on your loyalty level. This is a high fee. Binance fees, for example, are 0.1% or lower. Just based on the fees, if you spend $100 on crypto, after fees, once you receive your crypto it will be worth $96 to $99, assuming no price change.

Unfortunately, Coinmama also has a hidden fee. They are selling you crypto from their own inventory. This means they often don’t give you a competitive price. From its FAQ:

When doing a conversion, I found there was often a 6% or more reduction in the value of crypto received versus what was paid for. This is a combination of fees and a non-competitive price.

For example, when doing a transaction, if you convert $100 to crypto, the value of the crypto received will typically be about $93 or $94, not $96 to $99 as the fees would imply. Fees can be reduced by trading more volume.

Once you have traded over $50,000 in crypto, there is a permanent 25% fee reduction. Below this level, the required volumes are required every 90 days to maintain the lower fees. Even with the fee reduction, Coinmama has very high fees compared to most competitors.

First of all, here are the fiat currencies you can use to buy cryptocurrencies. These are also the only fiat currencies you can receive when you sell your crypto through Coinmama.

• USD
• EUR
• GBP
• CAD
• AUD

Here are the cryptocurrencies you can buy and sell on Coinmama.

• BTC
• ETH
• DOGE
• UNI
• AAVE
• LINK
• ETC
• BCH
• COMP
• EOS
• LTC
• OMG
• WBTC
• LRC
• NMR
• USDC
• USDT

Many exchanges offer a custodial wallet – a wallet that is hosted by the exchange which you can access by simply logging into the exchange with your username and password. Coinmama doesn’t offer this.

Rather, you can use your own wallet with Coinmama, or you can set up a self-custody wallet via the Coinmama website. This means you fully control your crypto, and if the exchange goes bankrupt or disappears, your funds are safe in your wallet.

If you use the Coinmama self-custody wallet that’s offered on their website, it’s limited to receiving Bitcoin and Ethereum. If you are unfamiliar with how crypto wallets work, there is a tutorial here.

Crypto exchanges are notorious for their glaring lack of customer service. With a number of other exchanges, it was difficult to get a hold of someone who could help, and it was often difficult to even find a page where I could message customer service or send an email.

Coinmama offers quite responsive customer support. It has a chatbot that can connect you to a live agent, as well as a contact form that you can fill out. Crypto Believers and Enthusiasts (loyalty program levels) receive faster support than newer clients (Crypto Curious level). That said, you can generally expect a response within 24 hours.

Also, for those new to crypto, Coinmama has an extensive Help Center to answer most of your common questions related to the exchange. For questions related to the crypto market itself, there is the Coinmama Academy. A well-laid-out series of articles that guide you through how the market works, as well as things you should know about crypto.

Coinmama is not recommended for “active trading” because of the high fees. However, if you want to buy a cryptocurrency, here’s are the steps you would take:

1. Create a trading account.
2. Log in and select the crypto you would like to buy and the fiat currency you want to buy it with.
3. Choose the amount you want to purchase, in either crypto or fiat.
4. Enter your wallet address to receive your crypto.
5. Choose your payment method to send fiat currency to Coinmama in exchange for your crypto.
6. Once you send the order, you’ll receive an email confirmation. If all the details are correct, click on the link to confirm the order.
7. Your payment will be sent and the crypto will be sent to the wallet address you provided.
8. The crypto will generally arrive in your account within minutes of the payment being confirmed by Coinmama.

The following chart shows all the methods of payment accepted by Coinmama, as well as any additional fees charged for that particular payment option. If there is a fee, it is in addition to the trading fees charged on the actual transaction.

The “fine print” states that the $30 minimum amount only applies to a customer’s first order. After that, a $50 minimum amount is required, or higher where specified. Definitely go with the 0% bank transfers/wires if possible.

What is Coinmama? 

Coinmama is a cryptocurrency exchange where you can buy or sell crypto directly with Coinmama. Unlike some other exchanges, you are not trading with other market participants; you are trading with Coinmama directly.

How long does Coinmama verification take?

Verification is a required process for setting up the account to trade. With level 1 verification, which only requires your personal info, ID, and a confirmed email address, you’ll be able to trade up to $2,400 in the account. This process takes less than 30 minutes.

Where is Coinmama located?

Coinmama is registered in Ireland, and is operated by Cmama Ltd.

How to get verified on Coinmama?

There are three levels of verification on Coinmama. The first allows you to trade up to $2,400. The second level lets you trade up to $50,000. Level three lets you trade up to $1 million. Level one requires personal information, ID, and a confirmed email address. Level two requires another ID, utility bill, and KYC questionnaire. Level three requires an updated KYC questionnaire.

How long does Coinmama take to send Bitcoin?

The Bitcoin will often be in your account within minutes once payment is confirmed. That said, if you are using a payment method that takes time for Coinmama to receive, that will delay receiving your coins until the payment has been processed.

How to sell bitcoin on Coinmama?

Log into your account, select “Sell”, and choose Bitcoin. Choose the fiat currency you want to convert the bitcoin to. Select the payment method. Confirm the transaction.

Final Thoughts on Coinmama

Coinmama is not an ideal crypto exchange. It charges high fees and has limited options for both the cryptocurrencies you can buy and sell and the fiat currencies you can use. If you are looking for simplicity, Coinbase exchange might be a better option. If you are looking for a more sophisticated and low-fee trading experience, then a large exchange like Binance may suit you better.

That said, if you feel you may need help in making your trades, or like having customer support available to you, then Coinmama may be a good choice. It prides itself on its customer service. Check out more crypto exchange reviews on the Crypto Brokers page.