Reviews

Phemex Review 2022: Analysis, Expected Fees & Current Bonus

Phemex Review
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Phemex is an up-and-coming global cryptocurrency exchange known for its user-friendly and game-like interface and its support for crypto trading with up to 100x leverage on dozens of top coins. 

In this Phemex review, we’ll discuss how the exchange works, where it’s available, what features it offers, its pricing structure, and its pros and cons.

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Phemex is a Singapore-based cryptocurrency exchange that allows you to buy and sell more than 250 coins using the company's spot exchange. The platform also offers investors crypto derivatives and OTC trading. As a standalone spot exchange, (e.g., no levered trading), Phemex is a solid platform with access to a large inventory of coins and low fees. However, the company is most known for its leveraged trading activities (such as crypto derivatives) with up to 100x leverage. Many of these strategies come with very high risk, and are therefore only suitable for experienced investors.

Pros:
  • Has relatively low fees for spot trading.
  • Offers opportunities to earn interest on select coins in your Phemex account.
  • Offers a free trading simulator.
  • Provides 24/7 customer support via chat.
Cons:
  • Allows for higher-risk activities, like 100x leveraged trading.
  • Limited withdrawal options.

Phemex Key Features

Here’s a look at some of the main features and tools available on the Phemex platform.

Spot Crypto Exchange

The company’s main feature is the Phemex spot trading exchange. Phemex’s exchange supports market, limit and conditional orders of more than 250 trading pairs.

Note that the Phemex spot exchange is a crypto-only platform. This means you cannot use it to trade with fiat currencies like the U.S. dollar.

Buy Crypto With a Debit or Credit Card

Phemex offers a feature where you can buy crypto using a debit or credit card. Phemex partners with several companies for this service, including MoonPay, Simplex, Coinfy and Banxa. 

When you make purchases via a debit or credit card on the platform, Phemex serves as an intermediary between you and those partner companies. 

Each company sets its own market rates and fees, so you must research and double-check what you’ll pay before making any purchases. Fees vary but can range from 2.5% to 7% of the transaction value. 

Additionally, some credit card providers view crypto purchases as cash advances, so double-check any extra fees you might be liable for before confirming any transactions.

Due to potential high fees and the ability to take on more risk, we highly discourage investing with a credit card. 

Derivatives Crypto Exchange

In addition to spot trading, Phemex offers a derivatives exchange where experienced traders can buy and sell perpetual crypto contracts with up to 100x leverage (the maximum leverage varies by country). This platform is designed only for professional traders because of the complexity and risk of trading crypto derivatives (especially on margin).

Leverage is powerful and best used by only the most experienced traders who possess a thorough understanding of its potential risks. 

OTC Crypto Trading

Although Phemex’s main feature is its crypto exchange, the company also offers OTC (over-the-counter) crypto trading. 

OTC trading refers to buying and selling crypto directly with another party in a transaction that Phemex mediates. This differs from spot and contract trading on the regular Phemex platform. 

When you use an exchange, your order is added to an order book and is executed as market conditions permit. OTC trading is typically more prevalent among people looking to trade large amounts of crypto.

Phemex offers its OTC trading in partnership with Legend Trading, and the company states that this feature is available in most of the U.S. and around 100 other countries. Phemex’s OTC services let you buy and sell crypto using crypto or fiat (via wire or ACH transfer).

As of the time of writing, investors are required to complete KYC (know your client) checks to use Phemex’s OTC platform. There are also fees for this service, which we discuss later in this article.

Earn Interest On Crypto With Phemex Earn

As a supplement to its exchange features, Phemex offers investors the ability to earn interest on select cryptocurrencies held in their accounts.

The interest rates that Phemex offers are subject to change at any time. As of the time of writing, Phemex offers interest of up to 8.8% APY and supports around a dozen popular coins like USDC, USDT, BTC and ETH.

Note that each coin has a minimum and maximum investment amount. You may also need to lock up your coins for a set period (typically seven or 14 days) to receive the best rates.

There is also a risk of losing money when keeping your crypto in interest-bearing accounts like those offered by Phemex. Keep in mind, cryptocurrency is not currently eligible for FDIC deposits, so your funds may be at risk if a hacker gained access to Phemex’s hosted wallets.

Note: In a response to the statement above, the company told us that “unlike many of [their] major competitors, Phemex has never experienced a hack.” The company also said that a “vast majority” of funds are held in cold wallets, which can provide a relatively high level of security. 

Phemex Supported Locations

According to Phemex, the company’s cryptocurrency exchange and all of its features are open to investors around the world who are over 18, including in the United States.

However, Phemex is not currently licensed by regulatory authorities in the United States. While this doesn’t necessarily stop U.S.-based traders from using Phemex with a VPN, doing so is risky. It’s unclear from regulatory authorities in the U.S. whether trading crypto derivatives — where Phemex sees a lot of its activity — is even legal.

Ultimately, trading on an unlicensed crypto exchange means having limited or no protection from U.S. authorities. If you’re a U.S.-based investor and choose to trade with Phemex, you’re taking on increased risk. 

Phemex Fees and Payment Methods

Phemex has a complex fee schedule, and its payment options are different from what you’ll find at many other exchanges.

Phemex Trading Fees

According to Phemex, all traders pay a 0.10% fee for spot trading. However, contract trading on Phemex uses a different maker/taker fee schedule. For contract trading, Phemex charges 0.075% for takers and -0.025% for makers.

Compared to most major crypto exchanges, Phemex’s trading fees are very competitive. But these fees are only relevant for trades placed on the Phemex exchange. Phemex’s other crypto trading services, such as OTC trading and its credit/debit card payments platform, have their own fee schedules.

For OTC trading, Phemex charges a maximum of 2% in trading fees. But this fee decreases to 0.08% for larger trades ($1 million and over). This 2% fee is not all-inclusive as, for example, it does not include the cost of a wire transfer, which is an additional $30 for trades of less than $10,000.

The fees for credit card and debit card crypto purchases are a bit more complicated. Since Phemex doesn’t process these transactions on its own (it does so through third-party partners, like MoonPay and Simplex), each provider charges its own fees.

When you search for offers from providers to buy crypto on Phemex, you will see a list of the current exchange rates each provider offers and any other relevant fees. Pay close attention to these fees before you buy crypto with Phemex or any of its partners.

Phemex Deposit and Withdrawal Fees and Options

As we discussed above, the fees for buying crypto using a credit or debit card on Phemex will depend on the provider you use (e.g., Simplex, Coinify) but tend to run high overall. There is currently no fee for depositing crypto to your Phemex account.

For withdrawals, Phemex now offers a P2P service, which allows for individuals to transact crypto directly. 

There is the option to sell via OTC trade, as discussed. 

The preferred method most traders use to remove their assets from the platform is to withdraw crypto to an external wallet. Phemex charges withdrawal fees for some coins, which you can check out on the company’s fee schedule.

The Risks of Leverage Trading

Phemex lets investors trade crypto with up to 100x leverage using perpetual contracts. This can sound exciting for crypto investors who are interested in leverage trading, but it comes with major risks.

Crypto trading is a high-risk activity on its own, especially given the volatility that we often see in cryptocurrency markets. When you combine the volatility of crypto with leveraged trading, it’s possible to lose your entire investment.

As a general rule, we do not recommend that people place leveraged trades in the first place, and especially not with crypto. We haven’t discussed it extensively in this article because it’s not something we would encourage for individual investors. But if you want to see how leverage increases the risk of your contract being liquidated, this video is helpful:

There is also some debate as to whether leverage trading of cryptocurrencies is legal in the U.S., so proceed at your own risk.

Phemex vs. FTX vs. Coinbase

Coinbase and FTX are two other well-known crypto exchanges, so it can be helpful to compare Phemex to these platforms. Here’s an overview of the key features of each company:

PhemexFTX (US)Coinbase
Supported coins (spot trading)250+200+100+
Offers fiat to crypto spot trading pairs?NoYesYes
KYC required?No, but it is necessary to use most of the platform’s featuresYesYes
Supported spot exchange order typesMarket, limit, conditional, stop-loss, take profitMarket, stop-loss limit, stop-loss market, trailing stop, take profit, take profit limitMarket, limit, stop-limit
Customer support options24/7 live chatEmail-based support ticketsLive chat, phone, email

Phemex FAQ

Does Phemex have a bonus for new users?

Phemex has one of the better crypto exchange sign up bonus promotions, in that there are multiple bonuses available. 

The easiest is a $10 bonus for retweeting their pinned tweet. You can then earn another $10 by depositing a minimum of 0.003 BTC or 0.04 ETH (approximately $50, depending on price fluctuations), and you can earn up to $160 for reaching various trading minimums and activities on the platform.

Account verification — which requires the submission of a photo ID — is necessary to be eligible to receive any bonus.

All bonuses earned on Phemex are trading bonuses. In other words, you can’t withdraw the funds you receive — you can only use them for investing and trading. However, you can withdraw any gains above the bonus.

How trustworthy is Phemex?

It’s difficult to make any general claims about the trustworthiness of Phemex. The company is young and it has a much lower trading volume than crypto exchanges like Coinbase, Binance and Gemini. Phemex is located in Singapore, and the exchange isn’t currently registered in the U.S., so U.S investors should watch out for potential risks (which we covered above). 

How do you get your money from Phemex?

Investors with Phemex can withdraw cryptocurrency from their accounts to their personal wallets. However, while you can buy crypto with fiat currency (e.g., U.S. dollars), there is no way to withdraw fiat from Phemex unless you place an OTC trade. If you want to sell your crypto for fiat, you may need to withdraw it from your Phemex account, send it to your account at another exchange (like Coinbase) and place a trade for the fiat currency of your choice.

Can you use Phemex in the U.S.?

Phemex states that you can use the platform in the U.S. However, Phemex is not licensed in the U.S. and may not be available to U.S.-based traders without a VPN. Some of the platform’s features, including derivatives crypto trading, may not be legal in the U.S. If you choose to use Phemex from the U.S., you do so at your own risk.

What security features does Phemex offer?

Phemex has a number of security features in place to protect client accounts. This includes multi-sig cold wallet storage for crypto held on the exchange, two-factor authentication, and advanced platform encryption through Amazon Web Services (AWS).

Is Phemex Right For You?

Phemex is a unique crypto exchange that offers some intriguing features for investors who already have experience in the crypto world. 

The company provides very competitive fees for its spot and derivatives exchanges. But there are some notable drawbacks and risks to Phemex — especially for U.S.-based investors — because the company isn’t currently licensed in the U.S.

Some of Phemex’s features, including its derivatives exchange and support for trades with 100x leverage, are also risky. These trading tools are inappropriate for new investors or anyone with low risk tolerance.

R.J. Weiss
R.J. Weiss is the founder and editor of The Ways To Wealth, a Certified Financial Planner™, husband and father of three. He's spent the last 10+ years writing about personal finance and has been featured in Forbes, Bloomberg, MSN Money, and other publications.

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