In the past few years, the number of cryptocurrency exchanges and the overall interest in cryptocurrencies has grown significantly. New websites for managing digital assets appear every day.
How to choose a proper crypto exchange under such variety?
This is the issue we are going to address in this article. After reading it, you will understand what aspects to pay attention to when choosing an exchange and where and how to purchase cryptocurrency so that it does not end up in the hands of scammers.
We will start with the most important aspect, security, and move to the other ones that are also worth taking into account.
This term refers to a set of tools used by an exchange to protect users’ data and assets. It is crucial to understand that exchanges are interested in providing the highest level of security, as this helps maintain their reputation in the eyes of existing traders and attract new ones. That is why you need to consider what protection methods are being used.
Typically, crypto exchanges operate under the AML/CFT Policy, which requires monitoring transactions to understand the nature of users’ financial activity. This policy allows exchanges to protect themselves from questionable transactions and customer churn.
AML/CFT Policy also includes a cryptocurrency exchange KYC procedure, that is, providing complete information about a user, including ID documents, by a user itself. The set of required data may vary depending on the platform. The user needs to pass KYC to access the full functionality and not worry about being involved in any suspicious activity.
The additional measure of protection is 2FA. Typically, this is a code or biometric data such as a fingerprint or face scan that helps to identify the user even if their password has been compromised.
Additionally, crypto exchanges ensure assets, store them in cold wallets and use other protection methods according to the anti-money laundering policy, like risk assessment.
What is the safest cryptocurrency exchange? There is no correct answer to such a question because this decision is up to you and your trading experience. As a rule, all major platforms try to provide the highest level of protection to their customers.
A support team helps users solve any problems related to using a cryptocurrency exchange. Often, users continue trading on a particular platform because their problems are solved quickly. You can check how well the support service operates before signing up. Ask support specialists several questions via online chat and check how quickly and clearly they respond.
A trader pays a certain fee every time a transaction is made (basically, this is a percentage of the transaction). It may be different for each trading pair, or vice versa, be the same for all pairs, deposits, and withdrawals. If you deal with large amounts of crypto, it will be expensive to pay high fees.
Any cryptocurrency exchange has fees. Sometimes, deposits or trading some crypto pairs can be free of charge, but this is not a common thing.
4. Deposit and withdrawal methods
Even relatively small platforms provide an opportunity to make deposits in several ways. Usually, these include bank cards, payment services, etc. For each cryptocurrency, the replenishment method may differ. You should find out how to top up your balance before signing up. It will allow you to make sure that you will use the exchange on comfortable terms.
Also, note that large payment systems do not cooperate with scammers, so their partnership with a crypto exchange signals that this particular site is trustworthy.
The same applies to withdrawals. Think about whether it will be handy for you to use a third-party payment service or a direct transfer to your credit card. Read the terms of the withdrawals. For example, WhiteBIT users without KYC are not allowed to withdraw more than 2 BTC per day. Working with fiat currencies without passing identity verification is not permitted as well.
By the way, the ability to top up your balance with fiat currencies or trade them is another indicator of the exchange’s ample opportunities. If there are no state currencies available, you will not be able to exchange your crypto for fiat and withdraw it directly to your bank card without intermediary services.
5. Number of assets listed
Some users think that if hundreds of assets are listed, it will be easier to make profits. It does not work this way. However, a large selection of assets allows for getting a more diversified income. First, you need to focus on those trading pairs you want or plan to deal with.
Some providers focus only on the most popular cryptocurrencies and do not list new assets very often. But there are also sites with a huge choice of assets where traders can try to trade cryptos they did not know about earlier.
If the exchange offers many assets but has few users, you may not be able to perform a crypto-to-crypto exchange because there will not be enough liquidity.
These are the most crucial aspects when choosing a reliable crypto exchange platform. We know it may be difficult to find an appropriate website on the first attempt. Besides, sometimes it is hard to find all info about an exchange.
Remember to carefully check what cryptocurrency exchange security measures or fees you will have to deal with, but never forget that your own experience should also be considered if you have one.
We hope these tips will help you find an excellent crypto exchange with vast opportunities, low fees, and numerous trading tools. Have a nice search!