Quick take
- Verify registration on the regulator's own website, not via links the platform gives you.
- Test a small withdrawal before depositing anything significant.
- Pressure, guaranteed returns and 'release fees' are signs of fraud.
We don't recommend platforms. Learning how to choose a broker or exchange really means learning these ten checks, which we would run on any of them.
- Is it authorised where you live? Search the firm on your regulator's register, typing the regulator's address yourself: the FCA register in the UK, national regulators in the EU, ASIC in Australia, NFA BASIC and FINRA BrokerCheck in the US. For crypto, look for local registration or, in the EU, a licence under MiCA.
- Is it the real firm? Clone sites copy real companies' names and licence numbers. Compare the web address, phone number and email on the register with the ones you are using.
- Is it on a warning list? Regulators publish lists of unauthorised firms and known clones.
- How are customer assets held? Look for segregation of client money and, for crypto exchanges, proof-of-reserves reports that also cover liabilities and are checked independently.
- Does withdrawal work? Deposit a small amount and withdraw it before committing more. Legitimate firms never demand a "tax" or "release fee" before paying out.
- What does it cost? Add up trading fees, spreads, funding, conversion and withdrawal charges. See trading fees explained.
- Is the leverage legal for you? Offers far above local limits suggest the firm is not authorised for your country.
- How secure is the account? App-based two-factor authentication, withdrawal address allowlists and login alerts should all be available.
- Can you reach a human? Test support before you need it. A company that only answers through a messaging app is a warning sign.
- How did you find it? If a stranger, a new online friend or an advert with a celebrity sent you there, stop. See how to spot trading scams.
Crypto broker or crypto exchange?
A crypto exchange matches buyers and sellers in an order book. Crypto brokers sell you coins directly at a quoted price, often through a simple app, and may build their margin into that price. Some firms do both. The checks below apply to either.
Common questions
What is proof of reserves?
A report from a crypto exchange showing the assets it holds for customers, often with a way for you to check your own balance is included. It is far more meaningful when it covers liabilities too and is verified by an independent firm.
Is an offshore licence good enough?
It usually offers much weaker protection than your home regulator, and getting money back from an offshore firm can be close to impossible.
Sources
- UK Financial Conduct Authority, Financial Services Register and warning list
- FINRA BrokerCheck
- National Futures Association, BASIC database