1. Check the company that operates the exchange and verify its details
Check the website carefully and try to find information about the company that provides the service. Look for the following information: company name, address, registration number and (optional) VAT tax registration number. The specific information should not be hidden in the Privacy Policy or the Terms of Use, but should be clearly stated and can be easily identified in the sections of the “communication” or “related” website.
Some people have difficulty cooperating with companies based in countries that are considered tax havens or countries that they may have never heard of in their lives, such as the Isle of Man, the Cook Islands, the Cayman Islands, etc.
Once you have identified the company's details, you can verify them. Most European Union countries have a database where company records are kept public. This helps you verify the company's details, check if it really exists, if it actually works, who the executives are, etc. In the case of Estonia, you can take a look at the following website: https: //www.rik. ee / en / e-business-register .
2. Check the licenses
It is a fact that there are not many countries that have a clear legal framework and regulations regarding cryptocurrency exchanges. Countries such as Liechtenstein and Estonia have taken care of this since 2018 and public records of regulated entities are available ( https://mtr.mkm.ee/). Some exchanges do not have a license for cryptocurrencies, but instead have licenses from the financial sector, ie an electronic money license. Search for a website where licenses are displayed and check public registers to verify them. If a company has a license, it proves that it has invested effort and time to acquire it and must follow certain regulations and internal procedures in order to maintain it. Licenses translate into trust and maturity on the part of the company.
When we were in the process of obtaining operating licenses for Kriptomat, there were several things we had to prepare and we had to take organizational measures to obtain them. We will only mention the following: one point of the application is that all members of the board had to prove that they have a white criminal record. So, we decided that each member of our team would need to provide an official certificate stating that they have a white criminal record in order to ensure that our team is made up of trustworthy individuals.
3. Check team members
It goes without saying that companies are never self-governing, but are run by a group of people. Search the website for information about the team and look for what kind of specialized knowledge they have, their experience and whether they have had another company in the past or worked elsewhere. In some cases, we have noticed the existence of companies run by infinite, irresponsible and sometimes overly young people to the point where serious issues of trust are raised.
4. Do research on the internet and social networks
Check the company / services on social media and see how they communicate with their community members. Read other users' comments about the service and post questions to these people. If a cryptocurrency exchange is a company based in Europe and serves Europeans who trade in Euros (EUR), but you see that most of the followers are from India or Indonesia, then something is probably wrong.
Use the channels where you can contact the team directly such as Telegram, Twitter, Facebook and post questions to ensure that all your questions are answered.
5. Check customer service
Customer support is very important when it comes to online businesses. We recommend that you contact the support team to resolve any questions you may have. Try the average response time (during working days and hours) and make sure that there are people who will be able to help you later. A reliable support team that responds quickly can be indicative of a reliable service.
6. Identify clear Terms of Use and Privacy Policy
The Terms of Use (TOS) and Privacy Policy often characterized as "things that lawyers urge us to read." It should be clear that these things have been written to protect you and your business. Every reliable cryptocurrency exchange should have clearly defined Terms of Use, stating exactly what the terms are and in which service they can be used. Judging by our experience, you can trust us when we say that Terms of Use cannot be just one page and there is no way we could ever trust our money to a Service without Terms of Use.
A cryptocurrency exchange needs to access a lot of your personal data. If this is legally guaranteed, it will require even more information from you. Make sure the data is protected and that this is explicitly stated in the Privacy Policy. It is clearly easier to trust a European Union-based service, as it must comply with a strict General Data Protection Regulation (GCP), where your rights are clear throughout the European Union.
Make sure you feel safe with the service you share your data with.
7. Try financing options
Once you decide to open an account and successfully go through the verification process, we strongly recommend that you try the financing options to make sure everything is working properly. Try deposit options with smaller amounts of money to see if the transaction is going as expected. After making a deposit, also try to withdraw money from your bank account to make sure you can receive the money as expected. Please note that some exchanges have additional requirements regarding the verification process for transactions in documentary currencies (ie where you came from for the capital and / or property, proof of permanent residence).
8. Try the wallet service
If the exchange provides an e-wallet security service, we strongly recommend that you try out how it works. Try to deposit a smaller amount of your bitcoin or other supported currencies and also make sure you try the withdrawal option after buying bitcoin .
Some users feel confident that they are keeping their crypto-assets (investment goods) away from the exchange in order to minimize any potential risk. It is no coincidence that the phrase: "it's not your keys, it's not your cryptocurrencies". On the contrary, there are users who consider external wallets to be too complicated and not so user-friendly. Therefore, they prefer to store their crypto-assets in an exchange. This is not a problem as there is access to your funds at any time. That's why we suggest you try the pickup option.
9. Look for transparency
In any case, you need to feel that you have complete control over your funds and a clear summary of your transactions. You should never use a service that does not have a clearly defined and fully understood charge structure (fees). Make sure that the charge for each transaction is clearly stated before you confirm it and that there are no additional hidden charges that you find difficult to understand.
We also highly recommend that you check the cryptocurrency acquisition process. Sometimes, 0% end can mean 5% higher bitcoin purchase price. We suggest that you always check the prices and have some measure of comparison with other competing services. In some cases, you may be surprised at what you discover.
10. Use common sense
Following these points will help you gain valuable information and make a wise decision about who you can trust and who you can't. But most of all, use your common sense. We suggest that you do not trust promises of easy money, high returns, etc.
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