If you want to trade cryptocurrencies, one of the first things you need to do is choose a crypto exchange. However, picking the best exchange becomes complex due to the ever-growing number of crypto platforms.
In this list, we have covered all the metrics that we use to rank crypto exchanges.
Ranking Criteria
Our website uses nine metrics to calculate the score of an exchange.
- Regulation
- Security
- Tokens Supported
- Fees
- Staking Support
- Trading Volume
- Withdrawal Limits
- Accessibility
- Customer Support
Regulation
The most important part of how we rate an exchange is how well it follows the rules set by regulators. The licenses and registrations held by an exchange act as a measure of its reliability.
AML and KYC Policies
Crypto exchanges are required to follow compliance standards before they can serve their clients. Two of the most important are the anti-money laundering (AML) and know-your-customer (KYC) policies.
The AML checks follow a set of frameworks that help in detecting illegal money-laundering activities. Strict AML policies can help identify suspicious monetary transactions, tax frauds, and other crimes.
Meanwhile, the KYC process involves verifying clients’ identities. As part of the due diligence process, customers must show government-issued documents to prove who they are.
Exchanges with strict KYC and AML policies receive favorable scores on our website.
Security
Security is another critical metric that we incorporate into our ranking methodology. With the number of hacking attacks on the rise, a "good" exchange needs to have enough security measures to protect its clients' assets.
For this category, we find out about security breaches that have happened in the past and what safety measures an exchange uses.
Hot and Cold Wallets
Hot wallets are always connected to the internet, making them faster for buying and selling crypto. Unfortunately, the always-online aspect of hot wallets makes them vulnerable to hacking-related threats.
Meanwhile, cold wallets store account keys in a secure, offline environment. Unlike hot wallets, cold wallets favor high security over the ease of making transactions.
The majority of customer funds should be kept in cold wallets and only a small amount of assets should be kept in hot wallets.
Cybersecurity Standards
Our ranking system also incorporates the security standards employed by exchanges. These include two-factor authentication, encryption protocols, real-time threat monitoring, and more.
Insurance Coverage
Many crypto exchanges offer insurance in case of hacks and security breaches. Some platforms provide FDIC insurance through partnerships with banks. Meanwhile, others have insurance funds with their custodian firms.
Proof-of-Reserves
Proof-of-Reserves (PoR) is a third-party audit of an exchange’s holdings. PoR audits ensure that the platform maintains user assets in a 1:1 ratio.
Since the collapse of FTX in November 2022, many exchanges have released their POR audits to provide transparency to their users. Our ranking system provides higher scores to exchanges that release their proof-of-reserves.
Tokens Supported
The number of cryptocurrencies supported varies between exchanges. Many platforms offer instruments like crypto derivatives, bonds, and stocks besides crypto tokens. Exchanges that support more tokens and instruments receive a higher rating on our website.
Fees
Crypto exchanges charge three types of fees: withdrawal, deposit, and trading fees.
Most exchanges have a tier-based fee structure. In general, users with higher tiers are charged lower fees for their transactions. Some platforms also offer discounts when you pay fees using their native tokens.
The exchanges that are higher on our list don't charge fees to deposit and have low fees to withdraw and trade.
Staking Support
Many exchanges offer other investment-related services in addition to the ability to trade cryptocurrencies. These include staking and lending facilities to boost your earnings. We grant higher scores to platforms that provide support for staking crypto assets.
Trading Volume
The total amount of tokens traded during a given period is referred to as trading volume. A higher trading volume usually implies that more clients favor the exchange. Crypto exchanges with higher trading volumes receive favorable scores on our website.
Withdrawal Limits
Most crypto exchanges impose limits on withdrawing crypto assets. Withdrawal limits usually vary depending on the currency of your choice.
On most platforms, users are required to complete their KYC verification before they can withdraw funds.
We provide higher scores to exchanges that have higher withdrawal limits.
Accessibility
Accessibility options include features that make it easy for clients to use the exchange. This includes support for payments through wire and ACH bank transfers, an easy-to-use UI, and mobile app(s).
Mobile App
Many crypto exchanges provide mobile apps for Android and iOS systems. Exchanges with apps on Google Play and the App Store receive better scores from us than platforms that only support web apps.
Customer Support
Customer support includes all troubleshooting facilities provided by an exchange. These range from simple FAQs and guides to live chats with dedicated personnel. We give higher scores to crypto exchanges with quick and responsive customer support.
Conclusion
All of these things are taken into account when we rank a crypto exchange. You can browse our reviews page to find out the pros and cons of different exchanges. You can also read our in-depth comparisons of crypto platforms on our Comparisons page.
