Mistakes to Avoid When Choosing a Crypto Exchange

New Zealand is one of the few countries that never banned cryptocurrencies. You will be surprised to know NZ is considered one of the most cryptocurrency-friendly countries in the world. If you are interested in crypto trading, you should find a crypto exchange.

There are several crypto exchanges in New Zealand, but not all are user-friendly. New Zealand has not enacted any laws regulating cryptocurrencies, and you need to be careful when selecting a crypto exchange as there is always a possibility of a scam. Here are mistakes to avoid when choosing a crypto exchange.

1. Selecting Exchange That Does Not Support Local Currency

If you are a beginner, you will be buying cryptocurrencies with hard-earned money in your bank. However, if the exchange does not support local currency like NZ dollars, you might have to purchase international currencies for trading, making things difficult.

Companies Swyftx New Zealand supports local currencies like New Zealand Dollars AU dollars, enabling you to wire transfer your money from the bank to your crypto account to fund your crypto purchases.

2. Selecting an Exchange That Is Not Safe and Secure

The crypto ownership rate of NZ stands at 1.76%, which is higher than in countries like Egypt, Norway, and Ireland. You might have heard stories of crypto investors earning billions in trade. However, experts mention that hacking attempts have increased, and several unsecured exchanges were attacked in 2021. As per the latest news, hackers stole cryptocurrencies worth $4 billion in 2021.

Security is of primary importance when choosing a crypto exchange. Therefore, you need to look at the technology employed by the crypto exchange to protect your crypto assets. Some of the security technologies that can protect crypto exchanges from cyber-attacks have dual-authentication. Biometric login technology can detect and prevent code injections and perform a full review of platform code by cyber security professionals plugging any vulnerability.

Many companies like Swyftx New Zealand employ a 2FA security system that requires users to use two separate, distinct forms of identification to access crypto accounts on the exchange.

3. Choosing a New Crypto Exchange

Recent data indicates around 85,008 New Zealanders own cryptocurrencies. Unfortunately, many people have lost their money to fraudsters when they have opted for new exchanges. Not all new exchanges that have come up recently are created for crypto trading; some are aimed to defraud people.

Fraudsters might not run some new exchanges but running a crypto exchange is not easy. Things may be smooth initially, but the exchange owners find it hard to run the exchange and close it as time passes. Moreover, if you invest in such exchanges, you will lose your crypto assets. Hence, you need to look for a crypto exchange that has served crypto traders for a long time and has earned people’s trust.

4. Not Finding Whether the Exchange Is Allowed to Operate in the Country

Since NZ has not regulated cryptocurrency and does not consider it a financial product, the government does not provide any specific licenses to crypto exchanges. That does not mean exchanges do not need licenses to operate in New Zealand.

NZ crypto laws categorize cryptocurrencies as securities, and the licenses required for securities exchanges are also applicable to crypto exchanges. Therefore, check its licenses awarded by NZ trading authorities before selecting any crypto exchange. If the exchange website does not mention any licensing information, call the customer service to get the licensing details.

These are mistakes you should avoid when selecting a crypto exchange. Crypto trading can help build wealth, but you need to select an exchange carefully. Else you will lose all your wealth in a few seconds.

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