Every service you use needs to be reliable, reputable and audited. For example, when playing at a kasyno online, you should choose licensed and legal operators. As can be guessed, this also applies to financial transactions and investments. Recently, interest in cryptocurrencies has increased enormously. Especially with the COVID-19 pandemic, people started to look for investment tools where their money would not lose value but gain value. In the same period, many coins such as Bitcoin, Ethereum and Dogecoin gained value with the decline in production and the entry of institutional investment companies into the crypto money markets. This situation “whets the appetite” of investors regardless of whether they are big or small. Cryptocurrency exchanges, which enable people to make crypto money buying and selling transactions, also act as an important intermediary at this point. Therefore, which cryptocurrency exchange we will do business with is a critical issue for the future and security of our investments. Lets find out how to choose a Reliable Cryptocurrency Exchange:-
What to Expect from a Crypto Exchange?
Crypto exchanges are websites where you can buy or trade any cryptocurrency. So, no matter what cryptocurrencies you are dealing with, you will have to use an exchange. Although there are many exchanges on the market, not all of them are reliable. Sometimes, even the biggest ones can go bankrupt. If we give some examples:
- Mt.Gox, the world’s largest crypto exchange hosting 70% of Bitcoins in the market, went bankrupt in 2014. The whereabouts of the 650,000 Bitcoins stored here are still unknown.
- Canadian-based Quadriga went bankrupt in 2019. During the investigation, it was understood that the exchange did not actually have an office anywhere and that the entire operation was carried out by a single person from home with a laptop. Quadriga was an exchange with a transaction volume that exceeded $1 billion.
- Turkey-based Thodex was an exchange with a daily transaction volume of over $80 million and was known for establishing the first crypto ATM in the country. The owner of the exchange fled abroad by shutting down the site in April 2021. He is currently wanted by Interpol and is estimated to have escaped with around $2 billion.
In other words, choosing a reliable exchange is the most important thing if you have cryptocurrency investments. But how can we do this? To answer this question, we first need to determine what to expect from them. So, what should you expect from a crypto exchange? First of all, of course, it should be reliable. While we trade cryptocurrencies, we must make sure that we can give orders and manage transactions anytime we want. A secure cryptocurrency exchange should have powerful API applications, advanced technology servers and a fully automated order system. In this way, we should be able to safely buy cryptocurrencies instantly, 7 days a week and 24 hours a day. Apart from these, this should be an exchange with a useful mobile application and website, where we can easily buy and sell. But ultimately, security is paramount in this ecosystem where everything is digital. So, what details are important in a reliable and secure cryptocurrency exchange?
Security Features in Cryptocurrency Exchanges
The crypto exchange must be:
- PSD2 licensed (Payment Services Directive)
- using a customer identification system (know your customer / KYC)
- complying with AML5 regulations (anti-money laundering)
A PSD2 licensed and regulated exchange that implements the European Union standards related to security measures at the highest level should be your priority to be comfortable with your investments.
Joining the Exchange Must Be Subject to Certain Conditions
An exchange usually first manifests itself through the customer acceptance procedure. It is a good indicator that the exchange accepts new customers by using the know your customer (KYC) process, which is also used by financial institutions and banks. This means that it also applies AMC (anti-money laundering) procedures. In other words, it is not possible to make transactions with money of unknown origin, and it is possible to obtain a certain customer quality. KYC and AMC processes are important criteria that determine the reliability of a cryptocurrency exchange.
The fact that the stock exchange is audited by an independent agency is another critical and reassuring detail. Joining an exchange that works with the world’s leading auditing companies (e.g. Deloitte) for the audition of cold wallets where customers store their crypto assets will make you feel comfortable about the security of your digital money.
In short, you should work with an exchange that uses the innovative power of digitalized assets and blockchain technology, which we will hear more often in the coming years, to safely eliminate complex financial barriers and offer its users a good experience.