Crypto Exchange Requirements: What You Need to Know Before You Trade

When you sign up for a crypto exchange, a platform where you buy, sell, or trade digital currencies like Bitcoin and Ethereum. Also known as cryptocurrency trading platform, it acts as the bridge between your money and the blockchain. But not all exchanges are built the same. Some require strict identity checks, others have zero security, and a few are outright scams. The crypto exchange requirements you face depend on where you live, what you’re trading, and whether the platform actually follows the law.

Most legitimate exchanges require KYC verification, a process where you prove your identity with government-issued ID and sometimes a selfie or proof of address. This isn’t just red tape—it’s how exchanges avoid being used for money laundering. The U.S., EU, and Japan have clear rules: if you want to trade on a legal exchange, you’ll need to hand over your documents. But in places like Colombia or Afghanistan, rules are loose or nonexistent. That doesn’t mean it’s safe. In fact, the lack of regulation often means higher risk. Platforms like QuadrigaCX and HB.top disappeared without warning because they skipped basic security and compliance. Meanwhile, exchanges like Bithumb operate under strict local laws, which keeps them stable—but also locks out foreign users.

Security is another non-negotiable requirement. A real exchange doesn’t just ask for your ID—it protects your funds. Look for cold storage, two-factor authentication, and insurance. If a platform doesn’t mention these things, it’s a red flag. Scams like VB Crypto Exchange don’t even pretend to follow rules. They lure beginners with fake promises, then vanish with their money. And it’s not just about theft—stablecoin depegging, cross-chain bridge exploits, and composability failures can wipe out your holdings even if the exchange itself is legit. That’s why understanding crypto exchange regulation, the legal framework that governs how platforms operate and protect users matters just as much as knowing how to place an order.

Some exchanges block VPNs because they can’t verify your location. Others let you trade without any ID—but then freeze your account later. And if you’re using a platform that doesn’t disclose its team, audit reports, or customer support, you’re not trading—you’re gambling. The best exchanges don’t just meet minimum requirements—they exceed them. They’re transparent, audited, and responsive. The ones that don’t? They’re not just risky. They’re dangerous.

Below, you’ll find real reviews of platforms that failed, succeeded, or outright disappeared. You’ll see how fraud, lax regulation, and poor security played out in real cases—from Canada’s biggest exchange collapsing to a fake AI token pretending to be a trading platform. No fluff. No hype. Just what actually happened, and what you need to avoid.