Getting Started
How should I check a crypto exchange before using it?
What should I verify before depositing with a crypto exchange?
Verify the exact legal entity and official domain, check its regulator entry and permitted activities, read custody and insolvency terms, test account security and withdrawals, compare live all-in costs, and confirm local eligibility. Start with a small reversible test; do not treat rankings, app-store badges or registration as a guarantee.
By: Sherpa Desk
Review status: Source-checked by the CryptoSherpa Editorial Desk; no named lawyer, auditor or financial adviser has reviewed a specific venue.
Scope: United States; check state and product eligibility separately.
- Verify the entity
- Brand names and regulator logos do not identify your contracting company
- Read custody terms
- Learn who controls keys and what customer rights may be in insolvency
- Test withdrawals
- A small live test checks the process but does not guarantee future availability
- Keep exposure limited
- Provider failure remains possible despite registrations and security claims
- 1Navigate to the venue independently and identify the contracting legal entity.
- 2Verify that entity, domain and relevant activities on the official regulator register.
- 3Read custody, asset segregation, insolvency, complaints and withdrawal terms.
- 4Secure the account with a unique password and phishing-resistant MFA where supported.
- 5Deposit and withdraw a small amount on the intended network before increasing exposure.
Identify the company behind the interface
Do not begin with a ranking. Type or bookmark the official domain independently, then read the terms for your country and account. Record the legal entity, company number, address and governing law. A familiar global brand may use a different entity for you than for another reader.
Search the relevant regulator’s official register and match the entity, domain and activities. For a US money services business, start with FinCEN’s search and check the permissions relevant to the actual product separately. Registration is evidence to examine, not an approval badge.
Understand custody and failure
Read who holds the private keys, whether customer assets are segregated, how the venue describes beneficial ownership and what its insolvency terms say. “Proof of reserves” without verified liabilities and legal rights is not a complete solvency assessment.
Check deposit and withdrawal networks, processing rules, fees, limits and account-freeze conditions. Complete a small round trip using the exact asset and network you expect to use. Verify every address and memo; a test reduces operational error but does not guarantee the provider will remain available.
Secure the account and limit trust
Use a unique password stored in a password manager. Prefer a security key or passkey over SMS where the venue supports it, enable withdrawal allowlisting, and keep recovery information offline. Never approve a remote-access session for “support”.
Finally, compare live prices and costs and check local restrictions. Avoid leverage you do not fully understand. Keep only the amount needed for the intended task with a third-party custodian; diversify custody only if you can manage the additional complexity safely.
Sources
Primary and authoritative sources checked on the dates shown:
- Crypto Asset Custody Basics for Retail Investors — U.S. Securities and Exchange Commission Investor.gov; accessed .
- MSB registrant search — FinCEN; accessed .
Questions
Does a high app-store rating prove an exchange is safe?
No. Reviews can concern ease of use rather than custody, solvency or legal protection, and fraudulent apps can imitate brands. Verify the publisher and domain through an independent official source.
What security features should I prefer?
Prefer support for phishing-resistant security keys or passkeys, withdrawal allowlists, clear session controls and timely security notices. Features only help when configured correctly and do not remove provider or market risk.
Does a successful small withdrawal prove the exchange is solvent?
No. It only tests that route at that moment. It cannot verify reserves, liabilities or future withdrawals, so limit the amount exposed to any one custodian.