Rule 1: Only choose legitimate exchanges
The very first (and probably the easiest thing) to check when you come across a new exchange is whether or not it is registered and licensed. Even today, way too many people agree to buy cryptocurrency through what can be best described as "fake exchanges," which are simply trying to offload coins that have been used in illicit transactions. If you agree to buy these coins, they will be recognized later, and you will be blocked from using them. No legitimate exchange will let you sell them, and service providers have software that will reject your payments. In other words, these illegitimate exchanges would be scamming you, plain and simple.
Fortunately, verifying the legitimacy of an exchange is really quite simple. Chances are, all the information you need can be found with a quick Google search. Most likely, the corporate registration information will be visible on the official website of the business registry in the exchange's jurisdiction. Usually these websites also list licences held by the company and the names of directors. You can check this information against claims on the website and on the directors' LinkedIn profiles. Rule 2: Evaluate Customer Support
One of the sad truths about the crypto industry is that most service providers fail to be truly
client-oriented. Regular users of some of the biggest exchanges find that the focus is really not on them. Common complaints are that there are few contact options for support(only email in 2021!?) and long response times. Even those exchanges that have received the most investment (looking at you, that one American exchange, publicly traded on the NYSE!) are understaffed, and all too often that staff is under-trained, and frankly not knowledgable enough to answer your questions.
The unfortunate truth is that these big exchanges seem only to care about the big institutional clients. New to crypto and having trouble with KYC documents? They don't care. Now imagine you are trying to withdraw some funds in a hurry - maybe it's tax day, and you need some liquidity. Your money gets blocked - which unfortunately happens all the time in crypto - and you contact the exchange and find out there is a 24-48 hour wait time for support! These things are just not right, especially considering how efficient most of the tech industry has become over the last few years.
When looking into an exchange, you should always verify first its 'contactability.' A good exchange should at least have two customer support options - and ideally three - such as phone, chat, or email. Second, you should do some Googling in order to evaluate the experiences of actual users who have already had issues to solve. Plenty of review sites, such as Trustpilot
, exist today, where customers just like you have written about their experiences using practically every exchange. Read through these testimonials, you might be surprised.