Choosing an exchange

This lesson deliberately recommends no particular exchange. Exchanges change, merge and go bust – it is far more useful to be able to choose yourself. And to start with a boring thing: the licence.

The MiCA regulation: a licence is mandatory in the EU#

The European Union adopted the MiCA regulation (Markets in Crypto-Assets). Its rules for firms providing crypto services have applied since 30 December 2024. The transition period ended on 1 July 2026 – since then, only licensed firms may offer crypto-asset services to people in the EU. A licence from one EU country lets a firm operate across the whole EU; in the Czech Republic, licences are granted and supervised by the Czech National Bank.

What this means for you: before signing up, check that the exchange has a licence. The European authority ESMA and national regulators publish lists of licensed firms.

Checklist#

• A MiCA licence – and from whom (your national regulator or one in another EU country).
• Identity check (KYC) – the exchange asks for your ID. It may be annoying, but it is a good sign: an honest exchange has to know who it is dealing with.
• Fees – for trades, the spread, deposits and withdrawals. Compare the total cost, not one number.
• Deposits and withdrawals – can you use a bank transfer in your currency? And is it easy to withdraw?
• Security – two-factor authentication (2FA), withdrawal confirmations, rules for new addresses.
• Support and language – when something goes wrong, you want to be understood.

What happened to FTX#

In 2022, FTX was one of the largest crypto exchanges in the world. It had famous ads, a sports arena with its name on it and celebrity faces. On 8 November 2022 it froze withdrawals, and three days later it went bankrupt. It turned out that customers' money had been secretly used by a sister company – about 8 billion dollars was missing from the accounts. Customers waited years to get their money back.

The lesson: size and advertising are no proof of honesty. That is one reason regulation exists today.

Red flags – walk away#

• It promises a sure or high return ("1% a day", "no risk").
• It has no licence, or you cannot verify it anywhere.
• It contacted you first – via social media, WhatsApp or an "adviser" pushing you to decide fast.
• You cannot withdraw, or withdrawing requires another deposit or a "release fee".

Common myths#

• "A big exchange cannot go bust." FTX did.
• "An identity check is suspicious." Quite the opposite – an exchange that does not want one is suspicious.
• "Lowest fee = best exchange." Fees come after the licence and security.