Crypto Exchange Explained: Essential Facts for Beginners

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Frequently Asked Questions

What is a crypto exchange?

A crypto exchange is an online platform where users can buy, sell, and trade cryptocurrencies, serving as a bridge between traditional finance and digital assets.

What are the main types of crypto exchanges?

The two main types of crypto exchanges are centralized exchanges (CEXs), which are managed by a company and require identity verification, and decentralized exchanges (DEXs), which operate without a central authority and allow users to trade directly.

How do I ensure the security of my funds on an exchange?

To ensure security, research the exchange’s security practices, use two-factor authentication, and consider withdrawing your funds to a personal wallet instead of leaving them on the exchange.

What are KYC and AML requirements?

KYC (Know Your Customer) and AML (Anti-Money Laundering) are regulatory requirements that require exchanges to verify the identity of their users and monitor transactions for suspicious activities, enhancing user protection against fraud.