How to Choose a Crypto Exchange: 5 Things US Traders Must Check
If you’re opening your first crypto exchange account — or switching from one you’ve outgrown — the choice feels overwhelming. Dozens of platforms, all claiming to be the “best.” Here’s how to cut through it in five checks.
1. Check the fees first (they compound fast)
Every trade has two fee types: maker (you add liquidity with a limit order) and taker (you remove liquidity with a market order). At base tier:
- Kraken: 0.16% maker / 0.26% taker
- Coinbase Advanced Trade: 0.60% maker / 0.80% taker
On a $5,000 trade, that gap is $22 vs $40 — every single time. Active traders lose real money by ignoring this.
What to do: Find the exchange’s fee schedule page before you sign up. Look at base-tier rates and check how volume discounts kick in.
2. Confirm it’s legal in your state
Not every exchange is licensed in all 50 states. New York (BitLicense) and a handful of others have tighter requirements. Some exchanges quietly block residents of certain states at registration.
What to do: On the exchange’s legal/support page, search for your state. Or try creating an account — most platforms detect your state during KYC and will tell you immediately if they can’t serve you.
See our comparison of Kraken vs Coinbase for a side-by-side US-state coverage check.
3. Verify the security basics
Security questions to answer before depositing:
- What percentage of funds are in cold storage? (90%+ is the floor)
- Has the exchange been hacked? If yes, how did they handle it?
- Do they offer two-factor authentication (2FA)? Hardware key support?
- Is USD cash FDIC-insured? (Only some exchanges; covers fiat, never crypto)
What to do: Read the exchange’s security page and look for a transparency report or proof-of-reserves audit.
4. Check coin availability
You need the exchange to actually list what you want to trade. Large exchanges list 200–300+ coins, but specific altcoins or newer tokens may only be on smaller venues.
What to do: Search the exchange’s markets/assets page for the exact coin you want before completing KYC.
5. Test the withdrawal flow before depositing large amounts
The best test: deposit a small amount ($20–50), buy a small amount of BTC, then withdraw it to your own wallet. Time the process. This tells you:
- How long withdrawals actually take
- What the actual withdrawal fee is (not the estimate)
- Whether customer support is responsive if something goes wrong
Start small, verify the full loop works, then scale up.
Next step: Read our detailed Kraken vs Coinbase comparison — the two largest US-legal exchanges, compared side by side on all five factors above.
Frequently Asked Questions
What is the most important factor when choosing a crypto exchange?
For most US traders, fees matter most because they compound with every trade. After fees, check that the exchange is licensed to operate in your state and holds most assets in cold storage.
Are all crypto exchanges legal in the US?
Not all. Exchanges operating in the US must register with FinCEN and comply with state money-transmitter laws. Some large global exchanges (Bybit, certain OKX services) do not fully serve US residents. Always verify the exchange lists your state as supported.
How long does it take to withdraw money from a crypto exchange?
Crypto withdrawals are typically processed within minutes to a few hours depending on network congestion. Fiat withdrawals to a US bank account (ACH) take 1–5 business days. Wire transfers can be same-day but usually cost $10–25.