Checklist: Exchange Risk Profile Assessment

Original Post on DNotesEDU.com https://www.dnotesedu.com/2018/09/checklist-exchange-risk-profile/

The following is a checklist designed to help individual investors conduct basic due diligence on cryptocurrency exchanges. Before sending money online you should always make to know who you are sending it to. It is important to remember that there are over 200 cryptocurrency exchanges in operation to date, and most are not operating within the confines of the law. Before you transfer any money to these exchanges, make sure to do some basic due diligence on the recipient of your funds.

Is the exchange free of illegal trading activity such as pump and dump, wash trading, or other forms of market and volume manipulation?

Can you verify the exchange’s solvency on each cryptocurrency’s block explorer?

Were you able to successfully make a small deposit and withdrawal?

Is the exchange a verifiable registered business?

If the exchange trades crypto token securities, are they registered to do so in every applicable jurisdiction of operation?

Is the exchange based in a country that has consumer protection laws?

Has the exchange suffered any security breaches?

Does the exchange have an insurance policy, or any guarantee of reimbursement in the event that your funds are stolen or lost due to mismanagement?

Does their customer service respond within 24 hours?

Has the exchange been in operation for long enough to estabilsh a verifiable track record?

Does the exchange have mainly positive reviews from it’s users and former users?

Is the new currency listing process based on merit?

Is the exchanges team made up of capable individuals with relevant experience?

If you do not answer yes to nearly all of these questions, you may want to reconsider using the exchange, and wait until you find one that is trustworthy.

You may also want to review: DNotesEDU’s Digital Currency Module – Exchanges https://www.dnotesedu.com/digital-currency/exchanges/