A centralized exchange is simultaneously a custodian, broker, matching venue, data provider and—in derivatives—a lender and liquidation operator. Choosing one is counterparty due diligence, not a comparison of home-page fee banners. Product access and legal protections vary by jurisdiction, so re-check the terms that apply to your verified entity and country.
1. Identify the legal counterparty
Record the company named in the user agreement, governing law, dispute forum and the entity holding customer assets. A brand can operate through several entities with different products and protections. Search regulator registers where applicable, but do not mistake a registration for insurance or a guarantee against insolvency.
2. Evaluate custody and solvency evidence
Proof of reserves can show control of selected on-chain assets at a moment in time. Solvency also requires complete customer liabilities, off-chain obligations, asset ownership and absence of undisclosed pledges. Ask what the report omits, who performed it, how often it is updated and whether users can verify their inclusion without exposing balances.
- Are customer assets contractually segregated from operating assets?
- Are reserve wallets and liability methodology disclosed?
- Is there a history of delayed withdrawals, unexplained maintenance or changing limits?
- How are forks, airdrops, delistings and insolvent assets handled?
3. Measure the market you will trade
Global volume rankings are less useful than the exact BTC/USDT perpetual or altcoin pair you need. Measure median spread, depth within 10–50 basis points, slippage at your intended size and behavior during volatile hours. Reported volume can be noisy; executable quotes and your own fills are stronger evidence.
4. Reconstruct the total cost
| Cost | Where it hides | How to test |
|---|---|---|
| Trading fee | Tier, maker/taker, product and token discounts | Export actual fills and fees |
| Spread/slippage | Book depth and order urgency | Compare decision price with average fill |
| Funding/borrow | Position notional and holding time | Sum realized funding by position |
| Deposit/withdrawal | Network, minimum and dynamic fee | Run a small round trip |
| Conversion | “Zero-fee” quote with a wider spread | Compare executable bid/ask with spot book |
5. Inspect account and API controls
Require strong two-factor authentication, session visibility, withdrawal allowlists and cooling periods after security changes. Bots need scoped API keys, no withdrawal permission, IP restrictions where feasible, documented rate limits and a reliable method to query orders, fills, balances and positions after a timeout or restart.
6. Run an operational acceptance test
- Complete identity and security setup before transferring material funds.
- Deposit a small amount on the exact network you plan to use.
- Place and cancel limit orders; record timestamps, partial fills and fees.
- Open and close the smallest derivatives position if derivatives are in scope.
- Withdraw to an address you control and confirm the full route.
- Export statements and verify that trades, funding and transfers reconcile.
A referral link—including any link on this site—is compensation, not due-diligence evidence. No venue should pass automatically because a publisher, influencer or trading tool integrates with it. Use the same checklist, keep only necessary working capital on-exchange, and maintain a tested exit route.
A simple decision record
Keep a one-page record: legal entity, permitted products, deposit networks, withdrawal limits, fee tier, measured spread/depth, security controls, API scopes, support path, known incidents and maximum balance. Review it after material policy changes or incidents. Then learn how orders and execution costs behave on the venue.