Identifying a good cryptocurrency exchange in 2023: the rules changed after the FTX crash

The stock test or reserve test

After the FTX crash, the backup test has been a concern, with the investment community asking for exchanges to provide certifications of their cryptocurrency holdings.

Proof of Reserves (PoR) is an audit to confirm that an exchange or cryptocurrency company indeed has 1:1 collateral on the digital assets it holds in escrow on behalf of its clients.

With over $3 billion lost to hacker attacks in 2022 alone, security should be a top priority for anyone #Challenge protocol.

that’s how #Chain ring Backup proofing and automation can be used to create secure and decentralized circuit breakers, helping protocols harden their security👇https://t.co/v6hLBVgRXb

—Chain Link (@chain link) January 11, 2023

Companies often turn to a third-party organization to perform this certification. To help investors understand the financial condition of a centralized exchange and whether it has sufficient liquidity to meet customer deposits, it makes its reserves public.

CoinMarketCap now includes setting up reserve tests for listed exchanges.

Safety

When a cryptocurrency exchange crashes or loses client assets, for example due to a hack, it is usually because the platform lacked adequate security measures. So, the first thing you want to evaluate is whether or not the company is licensed by a financial regulator. And it must be licensed by a reputable regulator, preferably in your area.

Exchanges have also realized that regulation allows them to acquire more customers. Binance is now regulated by several institutions in Europe, including the MFA in France.

The governor of the Banque de France, François Villeroy de Galhau, calls for compulsory licenses for companies #crypto.

States that about sixty companies, including #binancereceived a less stringent “registration” from the French MFA. pic.twitter.com/ugMF9zvhy0

— Goku 🗞 (@Crypto__Goku) January 6, 2023

The variety of crypto-assets

The last thing you want is to be limited in the crypto assets you can trade, as each offers a unique opportunity. Therefore, always select an exchange that offers a wide variety of NFT and crypto assets.

The best cryptocurrency exchanges will also have additional features to enhance your trading such as leverage so you can boost your performance. Some, like Binance, go so far as to offer P2P trading to cater to the needs of traders who want to trade directly with others using their local currency. All of this is meant to improve your experience and, therefore, your performance.

Commercial support

All financial markets today are dominated by automated trading. The trading robots they have also been adopted in the cryptocurrency industry as they can increase potential returns.

Unfortunately, few algorithms and robots currently available are reliable, which is why exchanges like eToro have turned to social trading. This is where users share trading ideas to help each other out, but eToro has taken it a step further by automating the process.

On the platform, you just follow a successful trader and copy all his trades at no extra cost. Whether you are a beginner new to cryptocurrency trading or a casual trader looking to earn a passive income, such trading assistance can be invaluable.