The collapse of big exchanges in the past taught one brutal lesson: your coins are only as safe as the platform holding them. Choosing an exchange deserves the same care as choosing a bank. Here are the checks that actually matter.
1. Licensing and reputation
Prefer exchanges licensed in a serious jurisdiction and operating for several years without major incidents. Search the exchange’s name plus “hack”, “fine” and “lawsuit” before depositing anything.
2. Security practices
- Two-factor authentication (2FA) with an authenticator app — not just SMS.
- Most customer funds kept in cold (offline) wallets.
- Withdrawal address whitelisting, so money can only leave to your addresses.
- Published proof of reserves showing assets cover customer balances.
3. The real fees
The headline trading fee is only part of the cost. Compare deposit fees, withdrawal fees (often the biggest), and the spread — the difference between buy and sell prices. A “zero fee” exchange with a wide spread can cost more than an honest 0.1% fee.
4. Test before you trust
Deposit a small amount, make a small trade, then withdraw to your own wallet. If withdrawals are slow, delayed or blocked by surprise conditions, walk away before real money is involved.
5. Keep long-term coins off exchanges
An exchange account is a promise, not possession. For amounts that matter, move coins to a wallet you control — ideally a hardware wallet — and use exchanges only for buying and selling.
