Exchanging cryptocurrencies can be frustrating, especially if you are a beginner and have no technological background. You’re wondering how you can find the most favorable conditions and the most liquid markets. But at the same time, you’re not sure how this whole process is handled and what you need to do to process your transaction fast and secure and not to get it lost somewhere in between.
There is a vast choice of crypto exchanges that actively promote themselves on the Internet. Cryptocurrencies are becoming mainstream and that’s something everyone can use in our day and age, regardless of their technical skills. So, let’s explore the features of a sure-shot legitimate crypto exchange platform, which even beginners can use.
An insider will tell you this. Truth is, everyone can make a website. This can be a very beautiful site enticing you to register and use someone’s services. But is this company legit?
When the website claims to be an exchange platform, you need to scroll all the way down and see whether this company has proper financial conduct licenses. These need to be licensed from authorities of the governments located in countries where the exchange operates. If it’s in the UK – there should be an FCA license. The US audience should look for the FinCen license. And so on. Also, look for the PCI DSS certification if the exchange claims to accept credit card payments. A decent exchange will never hide behind a beautiful design trying to cover the essential documents. When the exchange is legit, you will find all these documents on their website. And if you do, look closely at those documents. Specifically, you can check registration numbers in the government’s online database and see what information is available about this entity. Also, you need to make sure that the dates on the signed papers still apply.
Next secret – it’s practically impossible to forge online reviews on crypto exchanges. If you’ve been reading some reviews on Reddit or CryptoCompare, be sure – they are written by real people.
Although you’ll often come across some very emotional comments those are the ones that can be the least truthful. You need to look for those commenters and reviewers who logically explain pros and cons of their experience. Consider it a red flag if you can’t find the exchange name that you’re interested in, on one of those sites. When you are picking the crypto exchange platform it’s like picking a movie to watch on a Saturday night. If it’s not famous – it’s not worth it. Of course, the exchange should be famous but not infamous. You need to find the one that has the biggest amount of positive reviews and comments across the web.
It has lots of options
If the crypto exchange offers only a few options of crypto to exchange – ditch it. If you’re opening an account and all you see is BTC, USD, ETH, EUR, and maybe a couple more cryptocurrencies, please know – this is not a very good exchange. Good platforms will offer you hundreds of options of currencies (both fiat and crypto), exchange pairs, alongside other financial services like staking and trading. They may also have dozens of tech analysis tools like for example, a CEX.IO crypto price widget for a website.
They do it because they can. And according to insiders, it’s a tough job to incorporate each and every one of those coins. Only an exchange that has billions of trading volumes each day and hundreds of professionals across the world can do that. And this is exactly the exchange that you want to register with.
What do we mean by secure? It’s simple. When you’re looking for crypto exchange, you surely want to find the one which is like saying “your funds are safe”. You need to be absolutely sure that when you deposit or withdraw, as well as when you hold crypto for a long time, your funds won’t be stolen. For this reason, the crypto exchange platform should offer the highest level of technical security. In other words, they should be impossible to hack.
Here are the security features that you want to look for:
2FA authorization – you might think this is an excessive step to do when logging into your account. Yet, you’re never gonna believe how many hackers learned to get access to personal accounts and how many ways of doing it are invented by now. The only way to secure your account for sure – is the 2-factor authorization. For example, Google Authenticator generates a new code every 20 seconds. So, thankfully, it’s impossible to randomly pick it in such a short timeframe. Meaning, that hackers won’t be able to guess your password, even if they use high-end algorithms.
KYC, AML – these abbreviations might tell you absolutely nothing, yet experts of the industry think they are extremely important. They say all these verification procedures help them guard you against digital fraudsters. So this way, KYC (Know Your Customer) and AML (Anti-money-laundering policy) are acting like gatekeepers that protect their users from criminals. So if you’re observing that the exchange platform diligently complies with all these standards, it’s a sign that your account is protected by enhanced security measures.
Cold storage – some exchanges offer the combination of hot and cold storage which also secures your funds and sensitive personal data. Cold storage is the one that doesn’t have access to the Internet. In contrast, hot storage is like your regular online account, in which you send and receive crypto. So, it’s safe to know that while you’re able to use your funds however you want, they are being held in secure offline places while you sleep.
As you can see, there’s quite a bunch of aspects to consider when choosing a decent crypto exchange platform. The list above includes some of the most important ones. You can save this article for later and make a checklist next time you’ll be looking for an exchange where to register your account.