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Best Crypto Poker

How to Identify a Scam Crypto Exchange?

Disclaimer: The text below is an advertorial article that is not part of editorial content.

Most of the time, the choice of a crypto exchange makes the trading experience either a breeze or a nightmare for novices. But with so many options (since there are hundreds of crypto exchanges out there), there’s a slight chance you’ll come across a scammy one.

Yet, how do you separate the wheat from the chaff? To make sure you don’t happen to deposit your funds to an exchange that’s only going to get away with the money and to help you separate the wheat from the chaff, we’ve elaborated on the key factors to pay attention to.

#1 Be cautious about trading volume and liquidity

In the world of digital assets, prices tend to change in a split second. You, as a trader, might want to make moves during these price fluctuations and buy coins that have the potential of going to the moon or sell the ones that are likely to flop without waiting for too long.

To be able to get the most out of every moment in crypto, the exchange you have deposited your money into should fulfill your buy and sell orders promptly, at a price as close to the one you previously set, without making you pay a big markup.

That’s exactly why crypto exchanges have to be liquid, and the ones who are typically have a continuously high daily trading volume. It’s safe to say that crypto exchanges are more or less liquid depending on the number of users they have.

It also goes without saying that scam crypto exchanges don’t have large bases of users, or users trade their assets infrequently and the number of orders is quite low. When no one is willing to buy or sell cryptocurrencies, you have no other choice but to sell at a dramatically lower price or buy at an outrageously high price.

#2 Check up on deposit and withdrawals limits

No matter if you are a crypto trader or investor, at a certain point, you’ll definitely want to cash some of the money out. Most reputable crypto exchanges have set reasonable minimum and maximum withdrawal and deposit requirements. For instance, you can start trading on ChangeNOW with as little as USD 2. And then, some crypto exchanges have minimum deposits of USD 200, which seems, you’ll agree, a bit suspicious.

On the other hand, most exchanges have strict limits when it comes to withdrawals, which is totally fine. However, withdrawals should be simple and the minimum withdrawal amount should be reasonable as well. Don’t put your trust into an exchange that requires you to gather a significant amount of capital to be able to make withdrawals.

#3 Keep a tab on the fees

Crypto exchanges would not exist if it wasn’t for the fees that they charge every time users make trades, deposits, or withdrawals. Fees vary from one exchange to another and go from 0 to 4.5%, depending on the type of transaction.

Although ChangeNOW doesn’t disclose exact fees, we found that fees vary depending on a pair and amount; about X% on a network-fee heavy pair like BTC-ETH, and about X% on others like TRX-XRP. If a crypto exchange is charging abnormal fees, you can rest assured that they only want to rip you off, and you should definitely avoid such deals.

#4 Check their customer support

Provided you are using a crypto exchange for the first time, you’ll probably be needing some time to get to know the way it works. Sometimes, you may also need additional help or some of your questions answered. And, knowing how dynamic crypto markets are, you are going to need the answers in a matter of minutes! With scammy crypto exchanges, contacting someone from their customer support is either impossible or their agents take a long time to respond.

#5 Do the background check

There’s nothing wrong with reading online reviews before committing your trust to a certain online service. Google is your friend so make sure to see what users have to say about a couple of exchanges you have in mind. Also, try finding more info about the team behind the platform. Are they doxxed? Can you find their profiles on LinkedIn and other social media? Do these people seem real? Fraudulent exchanges provide very little to no information about their teams. 

Also, make sure whether they have a strong digital and media presence. Have you ever seen them attending or speaking at events and conferences? Are they building partnerships? All these factors matter when you’re trying to figure out which exchanges are reputable and trustworthy and which ones aren’t.

#6 See if they are insured or not

Gemini, Binance, and FTX are among a few exchanges that insured their users’ funds. This truly instills trust in their services since entrusting money to a company you know very little about doesn’t seem like a wise decision.

Crypto exchanges that offer insurance protect their users from hacks, rug pulls, and robbery just to name a few cases. Keep in mind that not all exchanges have the same insurance, and you should check what each covers.

Although having a healthy insurance policy is such a good idea, not all exchanges offer this level of protection. The ones that don’t simply don’t care that much about their users, and, could be fraudulent.

#7 Find out about their security practices

Trusting someone with your money is a big thing. Thus, you should keep a check on security practices different exchanges have (at least if you don’t want to end up empty-handed). As a rule of thumb, crypto exchanges that have been around for years and have a huge base of users are the most secure, but, of course, there are some exceptions.

BitMart is a perfect example of a well-known exchange that still got hacked. In this cyber attack, somewhere between USD 150,000 and USD 200,000 were stolen. No platform is 100% secure but it’s common sense that you shouldn’t be investing significant amounts of money into exchanges that have a history of cyberattacks. While some platforms suffer from attack, others help them get their funds back.

Scam crypto exchanges don’t even use basic protections such as 2FA while the ones that care about their users’ assets typically use several layers of protection, including facial identification or biometric login, and require providing government-issued identifications upon opening a new account in order to ward off imposters. Some of them even require authentication when users want to change funding levels or buy or sell their cryptocurrencies.

Also, it’s safe to say that non-custodial exchange services seem to be way more reliable than centralized custodial exchanges. Why’s that? Non-custodial crypto exchanges (one of which is ChangeNOW) never force you to sign up, respect your privacy, and give you the ultimate control over your funds. As long as you are keeping your private keys securely, you don’t have to worry about hackers, government regulations, or sanctions. 

#8 Think about the asset choices they provide

It is nearly impossible to have all of the digital assets you are interested in listed on a single exchange. After all, with more than 10,000 cryptocurrencies, and 100,000 trading pairs, it’s all understandable.

Exchanges do their best to list coins with high market caps but some of the lesser-traded ones with huge potential as well. This practice helps a lot with getting in the eye of active crypto traders and investors. And then, some platforms list rather obscure privacy coins only, which could also be a major red flag.


It doesn’t necessarily mean that every crypto exchange that has higher fees or lists shady coins is a scam, however, if you come across the one that ticks all of the (negative) boxes we’ve listed, then you’d better run away. The upshot is that you can never know whether your funds are 100% safe since the entire crypto space still lacks regulation but you can, at least, stay away from platforms that scream “give us your money and get lost”.