itBit Review

Company Overview

The itBit Digital Asset Exchange was launched in 2012 by Paxos, using a regulated blockchain infrastructure. It’s based in New York City but it also has offices in London and Singapore. ItBit is available in many countries around the world and all 50 U.S. states.

Although itBit offers a small selection of available cryptocurrencies, it features an over the counter (OTC) trading desk for large transactions and a variety of APIs for advanced trading strategies. Due to the limited number of coins and deposit/withdrawal options and a fee schedule that rewards volume, itBit may be best suited for institutional investors with high trading volume and access to the Silvergate Exchange Network (SEN).

Pros Explained

• Low trade fees and rebates on every Maker order: ItBit has relatively low spot trade fees compared to other crypto exchanges, and every Maker order receives a rebate of a certain percentage that depends on your trading volume. This cash rebate will appear in your fiat wallet.
• Services for personal and institutional traders: ItBit has the most basic trading options, like market and limit orders, which could satisfy many personal investors. But it also provides tools for institutional clients and fintech companies, like crypto asset custodial services and API integrations.
• Regulated by the New York State Department of Financial Services (NYDFS): ItBit was the first crypto exchange to be fully regulated in the U.S. All customer assets must be held in bankruptcy-remote accounts, separate from corporate funds.

Cons Explained

• Limited number of cryptocurrencies and deposit options: You’ll find a very limited selection of crypto on itBit compared to many other exchanges. And the only deposit options are wire transfer, crypto wallet, and the Silvergate Exchange Network (SEN). There are no options for bank account, debit card, or ACH deposits.
• Relatively high fiat withdrawal fees: ItBit has some of the highest fiat withdrawal fees among the crypto exchanges we reviewed. You’ll pay $20 for a wire transfer withdrawal in the U.S., or $30 outside the U.S., unless you can use the SEN for free transfers.
• ACH withdrawals are not supported: ACH is a simple and inexpensive way to transfer funds, and many crypto exchanges allow it, but not itBit.

ItBit is a cryptocurrency exchange created and managed by Paxos. Paxos provides a number of financial services, including a blockchain infrastructure, several digital currencies, and software to help fintech companies create and manage digital assets. It puts a strong focus on regulation and security.

ItBit has fewer available cryptocurrencies than most other exchanges, and some traders could find the order types too limiting as well. But it includes a number of tools that could make it useful for institutional clients. 

Cryptocurrencies Available on itBit

ItBit only supports about a dozen cryptocurrencies, in stark contrast to some other exchanges with hundreds of available coins and tokens. The list is short, but it features some popular altcoins like MATIC and LINK, along with Paxos’ own native coins.

1. Bitcoin (BTC)
2. Ethereum (ETH)
3. Litecoin (LTC)
4. Bitcoin Cash (BCH)
5. Binance USD (BUSD)
6. Aave (AAVE)
7. Polygon (MATIC)
8. Chainlink (LINK)
9. Uniswap (UNI)
10. Pax Gold (PAXG)
11. Pax Dollar (USDP)

Trading Experience

ItBit only offers three basic order types for trading:

• Limit order: An order to buy or sell an asset at or below a certain price
• Market order: An order to buy or sell an asset immediately, at the best available price
• Post-only order: A type of limit order that will not remove liquidity and will only post if it doesn't lock or cross with an existing order

Some people will find these order types suitable, but experienced traders may want a more robust platform with more advanced order types and more available cryptocurrencies.

APIs

Along with trading services through the basic platform, itBit offers three types of APIs to help execute more complicated strategies: 

• Stablecoin swap: Swap from one stablecoin to another with no fees
• Fiat gateway: Swap between fiat and stablecoins issued by Paxos (including USDP and BUSD)
• Trading/market data APIs: Provide access to itBit’s order books, pricing data, and trade data and allow customers to automate fiat/crypto trading. These APIs can be useful for institutional, high-frequency, and/or algorithmic traders.

OTC Trading Platform

Over the Counter (OTC) trading refers to trading directly from one party to another without going through a centralized exchange. Cutting out that third party can result in more efficient trades at better prices and lower fees.

ItBit offers OTC trading for eligible investors, both personal and institutional, but it requires a minimum trade size equivalent to $100,000. Clients must contact the OTC desk directly to make use of this feature.

Fees

ItBit has a relatively simple fee structure, with a single fee table for all traders.

Deposit and withdrawal options are somewhat limited, and they can get expensive with frequent transactions. Institutional investors with accounts at Silvergate Bank can use the Silvergate Exchange Network (SEN) for free deposits and withdrawals of U.S. fiat currency to help mitigate costs. Silvergate Bank is a California-based company that provides financial infrastructure for fintech businesses and investors.

Like many exchanges, itBit charges tiered Maker-Taker fees for basic crypto trading. The higher your 30-day trade volume, the lower your costs. “Maker” orders are placed on the order book and they add liquidity to the market, while “Taker” orders execute immediately and remove liquidity.

ItBit provides a rebate for every Maker order after testing this perk with Ethereum and finding it popular. Rebates are provided in the form of cash to users’ fiat wallets. The amount of the rebate depends on the trading volume tier.

Maker-Taker fees at each tier are shown below. Take note that additional fees apply for PAXG transactions.

Security

ItBit employs several security measures that you’ll find on many crypto exchanges:

• Multi-factor authentication (MFA): ItBit requires MFA through an authenticator app such as Google Authenticator when logging in.
• Cold storage: ItBit stores the majority of customer assets in cold storage where it’s better protected from hacking.
• FDIC insurance: Eligible U.S. dollar and stablecoin deposits are held in FDIC-insured accounts at U.S. banks.

Along with the basics, itBit features special custodial services for institutional clients and insurance for its native PAXG token:

• Crypto asset custodial services: Offers 100% cold storage for crypto assets. Assets are backed by mandatory financial reserves and there's regular and auditable account reporting.
• PAXG insurance: PAXG is a token backed by actual gold, and Paxos provides insurance and attestation reports to verify the gold held in custody.

Opening an itBit Account

ItBit’s account registration process varies depending on whether you’re a personal or an institutional investor. Personal registration is a simple matter, but creating an institutional account takes more documentation. Each requires identity verification according to strict Know-Your-Customer practices, which are standard across much of the industry.

For personal registration:

1. Create an account: Visit the new account creation page to begin and follow the instructions.
2. Verify your email address: Check your email and follow the verification link. Then set up multi-factor authentication for your account using an authenticator app.
3. Verify your account: Provide the required personal information from a valid government-issued photo ID and read the terms and conditions.
4. Verify your identity: Upload a photo of your ID and a selfie, and provide any other required verification documents.

For institutional registration:

1. Create/verify your account: Follow the four steps listed above, but select “I am registering for an institution” on the account verification page.
2. Meet additional KYC standards: Complete the Institutional Onboarding KYC application form and submit it via the Institutional/Business Onboarding Document Submission tool. Submit the required documentation for your organization, such as articles of incorporation, national/state registry filings, Tax Identification Number, Certificate of Good Standing, and proof of residential address.

The personal registration process could take about one to three business days to complete; the institutional registration process could take about three to five business days.

Customer Service

ItBit only provides personal customer support through online email tickets. Current users can submit a request through an online form and get a response by email. You can contact the support team in general or choose a specific issue like Password Reset, Missing Wire Deposit, or Missing Crypto Deposit/Withdrawal.

Institutional clients will have access to a relationship manager, who can provide more in-depth support.

Use the contact form on the itBit homepage if you’d like to contact the OTC desk. Financial institutions that would like API access from Paxos can use the same form.

Paxos is regulated by the New York State Department of Financial Services (NYDFS) so you can also send a complaint to the appropriate government office. Call 1-800-342-3736 or visit www.dfs.ny.gov for more information. Mail can be directed to:

New York State Department of Financial Services
One State Street 
New York, NY 10004-1511

Customer Satisfaction

Like most crypto exchanges, itBit’s reviews are mixed and they skew toward the negative. Most personal customer complaints involve funds not being withdrawn or deposited correctly, without much help from customer support. But itBit offers services for both personal and institutional investors and provides a premium level of support for the latter.

Account Management

For basic users, itBit isn’t the most complicated exchange. Its online dashboard is easy to use and navigate. You can begin trading by adding a bank account for a wire transfer or depositing crypto after setting up your account.

Select the Wallet tab at the top of the screen to deposit assets to your itBit wallet or to transfer assets to another wallet. You’ll receive an email notification when deposits and transfers are completed.

ItBit offers several options to transfer or withdraw assets:

• Crypto asset withdrawals to external wallets
• Wire transfer withdrawals to bank accounts
• Transfers to brokerage accounts
• Transfers to other Paxos users (peer transfers)

Institutional investors who want access to itBit’s APIs or OTC desk should contact their relationship managers.

Final Verdict

ItBit is a relatively simple exchange with a small selection of available cryptocurrencies and limited and expensive deposit/withdrawal options. It may be less appealing for the typical personal investor, but its wide selection of APIs, OTC trading platform, and crypto asset custody services make it a good choice for institutional investors who want a regulated, secure exchange to trade just a few cryptocurrencies.

Frequently Asked Questions

Is itBit legit?

ItBit was the first crypto exchange to be licensed by the New York State Department of Financial Services, ensuring a certain level of security and insurance for customer assets. It also maintains FDIC insurance, as well as insurance for its PAXG coin and a set of standards to secure custodial assets. ItBit has taken steps to become one of the more trusted crypto exchanges on the market.

What are the fees for trading on itBit?

ItBit's trading fees are low when compared to other crypto exchanges. It charges tiered Maker-Taker fees for basic crypto trading, but every Maker order gets a rebate that can vary depending on trading volume. That said, its fiat withdrawal fees can be high.

Does itBit have an app?

ItBit is internet-based. Accounts must be opened and managed via its website. The platform isn't available as an app.

Who owns itBit?

Paxos states on its website that this is the name of itBit owning company. ItBit is the brand name it launched for its exchange. Accessing the itBit platform involves logging in to your Paxos account.

Is itBit regulated?

Cryptocurrency exchanges aren't members of the Securities Investor Protection Corp. (SIPC). But itBit is licensed by the New York State Department of Financial Services. This requires that it maintain and protect the security of its customers and carry insurance for their assets.

Methodology

Investopedia is dedicated to helping those who are interested in cryptocurrency investing to make informed and safe decisions. We're committed to providing our readers with unbiased reviews of the top cryptocurrency exchanges for investors of all levels.

Exchanges were reviewed based on many factors, including security, fees, and the number of cryptocurrencies available. We also considered whether the exchange is regulated by a proper agency or entirely decentralized. Our full cryptocurrency exchange methodology, including the review process and weighted data points, is available for review.

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