Crypto Exchanges talking about crypto exchanges there are a huge uncertainty whether crypto exchanges are safe or not. We are going to write about everything you need to know about crypto exchange safety.
To answer the question, you can say that there is no complete safe way to pay with crypto exchange. A majority of crypto exchanges do not have a safe infrastructure and does not have a governmental regulation. These errors make crypto exchanges vulnerable for different hacks.
We are going to list 10 things that you always need to check when using crypto exchanges.
Licenses and regulation
To ensure that the you will use are safe it is important that there are licenses and regulations. When a crypto exchange isn’t being regulated they are not registered as a Money Transmitting Business (MTC). MTC is a company that handles money transfer services.
For a company to register as a MTB the company needs to have a secure capital requirement. When a MTB business is registered the government can ensure that the MTB business have enough capital to be able to handle any problems, such as, hacks or thefts occurs.
With these facts, it is safe to say that you should not use crypto exchanges what is not licensed or regulated.
Use a digital asset storage
If you are using a that are a MTC you have your digital asset storage already covered. It is important that the deposited cryptocurrency is placed in a safe place. You should always cover that you have a digital asset storage for your own safety.
We can recommend Coinbase.com. Coinbase is accurate and careful when explaining how they store their customers assets.
The size of crypto exchange
A big and popular is often more safe and reliable than a smaller one. Bigger crypto exchanges often need to have a good reputation and to get a good reputation you need to make your customers happy.
So, before you start to depositing make sure to choose a bigger scale crypto exchange.
Location is key
When choosing a , it really matters where the crypto exchange is located.
- Depending in which county the crypto exchange is located it can occur some taxation problems.
- There are a number of countries that have a bad reputation when dealing with crypto exchange. Avoid these sorts of countries.
that are located in Europe, US, China and Japan are often crypto exchanges you can trust. Countries located outside these jurisdictions are often not as trustworthy. You can read more about safe crypto exchanges on Tradingbrowser.
When choosing a company the longer the company has been running the better. The age of a company often builds some kind of trust. We recommend that you choose an exchange that has a long history in the business.
A new company that has been running for a few years in not always a bad idea, but it comes with a higher risk.
Know your customer
Know your customer (KYC) is a basic thing that all financial institutions should use. A should always require some KYC documentation when customers sign up for a new account.
The different documents that could be required are:
- Home address.
- Date of birth.
- Copy of driving licence.
- Picture of passport
- Social security number.
Anti-money laundering is a procedure used to detect money laundry on the crypto exchange. Financial institutions must have this regulation and it contributes to the company’s trustworthiness.
Customer support can play an important role in making sure an exchange service is safe. If for example your account is being hacked it is very important that you immediately can contact customer support.
2FA is a security feature that will protect all your cryptocurrency from hackers. 2FA stands foe Two-Factor Authentication. Crypto exchanges can be safe even without 2FA but we highly recommend using 2FA if given the opportunity.
The bigger volume that is being trades on the crypto exchange the safer you can feel. Volume adds credibility. The more people that are engaged with the crypto exchange that adds trustworthiness.