When looking to get involved with cryptocurrency, you’ll find there are various ways to buy and sell these digital assets. The most popular way to buy is via a cryptocurrency exchange. These are platforms not too different from a traditional stock exchange.
However, unlike a stock exchange, many of these platforms are unregulated. Or, at the very least, are scams and unsafe for you to trade on. In this guide, we’ll inform you of what you need to know to verify a trustworthy crypto exchange.
The number one thing to look for in a crypto exchange is security. When signing up, what sort of policies does it have? Can you add two-factor authentication (2FA) to your account? Are there proper encryption methods in place? Can you sign up for secure email alerts or even text messages? Do some research on the platform. A legit exchange will have loads of documentation detailing their security measures.
Also, when logging into the platform, make sure your address bar has “https” in the front. This means you’re connecting securely. If this tag isn’t at the front of the exchange’s URL, get out of there ASAP.
Finally, check that the platform has valid insurance. If it is registered or has a real team behind it, the exchange should have some form of an insurance policy. This way, if your assets are ever stolen, your funds can be recovered without issue.
In the same vein as security, look around on Reddit, Twitter, and other spaces regarding the platform. See what customers are saying about the space. Do they like it? Have they had a good experience trading and holding assets on the platform? Maybe the exchange has had a recent hack, and customers are displeased. It’s possible customer service isn’t very helpful at all.
Do a deep look into their reputation. A surface-level examination will not cut it here. Forums, subreddits, and tons of user insights are the way to go.
Most legitimate cryptocurrency platforms require you to verify your identity. While this generally goes against the anonymous mantra of crypto, this does mean the platform cares about security. They want to know who is trading and if they’re doing anything suspicious.
If a platform doesn’t have strict verification requirements, it’s possible they’re not too high on security, either.
When searching around, try talking to customer service reps on an exchange. See what options are available, like 24/7 text chat, email, or even voice. Ask them about security and trading and other basic information. If their responses are fast and thorough, you can probably assume they’ll be there if you really need them.
Lazy, unresponsive, or simply unknowledgeable customer service reps indicate an untrustworthy exchange for sure.
When you find a new platform, compare its listed crypto prices with that of other exchanges. Untrustworthy exchanges will have vastly different crypto prices from the established ones. Some fail to update their prices at all. You very well might see a couple thousand dollars difference from a scam exchange to a good one.
This might sound obvious, but it’s still vital. Look into the team behind a cryptocurrency exchange. Are these known names? If not, do they at least have a long history in the space? You don’t want to trust some random crypto newbie with your funds.
Also, check into the team member’s history for any scams or untrustworthy activity. If there are any red flags in their past, especially from top employees, the platform isn’t worth your time.
Of course, these are just a few things to keep in mind when browsing crypto exchanges. Alongside these, pay attention to the website, UI, and the overall user experience. If something feels off to you, it probably is.