1. KYC / AML
Different exchanges adhere to different regulations depending on location, workflow and services offered.
There are Know Your Customer (KYC) standards that platforms adhere to, as well as Anti-Money Laundering (AML) standards aimed at preventing money laundering.
Some exchanges use both standards for withdrawing funds, and clients are required to provide a passport and residence permit. Other exchanges require these same documents when creating an account.
Since the cryptocurrency industry is still “young”, reputation plays an important role. In addition, a very large part of the cryptocurrency platforms are associated with illegal activities.
Each exchange takes its own security measures. If a site does not use two-factor authentication, it will not meet modern security standards. Google authenticator, Authy and Yubikey are most commonly used for the above procedure.
4. Insurance fund
Users need to know if their chosen site has an insurance fund and how compensation is paid. Some exchanges are covered by the Federal Deposit Insurance Corporation.
5. Real currencies
At some point, traders may need an exchange that allows transferring national currencies to a cryptocurrency platform or withdrawing profits in the form of cash. You need to know which banks the platform cooperates with.
6. Trading with leveraged funds
Derivatives platforms often offer leverage that allows you to borrow funds to fund trades. The exchanges offer 1x – 100x leverage.
Trading platforms take into account the number of users and the trading volumes of the assets that are traded on them. If a trader wants to sell 100 BTC, he is unlikely to do so on an exchange with low volumes, as there will not be enough buyers. To estimate the turnover of the site, you can turn to third-party sites that offer statistics. These include Coin360, CoinMarketCap and OnChainFX.
Asset prices vary on different exchanges. If the price swings are too high, the exchange may suffer from a lack of liquidity and volume. Most exchanges uses trading view as cryptocurrency analysis website.
9. Choice of assets
Bitcoin, Ether and Litecoin are available on all cryptocurrency platforms. Smaller tokens may not be available on smaller exchanges.
Most exchanges charge their clients with commissions for trades. Traders buy and sell much more often than investors, and therefore the size of the commission is important to them. And, in conclusion, I would like to advise beginners to conduct their own research in the field of digital currencies.