Unfortunately, many of our readers lost more money by keeping their bitcoin and crypto on FTX last year than they did by betting on the Super Bowl or at the blackjack tables. Once reputable long-term saving companies like BlockFi and Celsius also went bankrupt, which left a lot of cryptocurrency fans out of pocket. In our opinion, you should never keep a large amount of money on a bitcoin exchange and you should instead always hold it in your own hardware wallet where you control the private keys.
However, we know that sometimes you need to hold stablecoins like Tether or Bitcoin on exchanges for a brief period of time when you need to buy or sell, so here are a few tips for poker players and sports bettors on what to look for when choosing a safe crypto-exchange.
However, we know that sometimes you need to hold stablecoins like Tether or Bitcoin on exchanges for a brief period of time when you need to buy or sell, so here are a few tips for poker players and sports bettors on what to look for when choosing a safe crypto-exchange.
- Research the exchange: Before you start buying stablecoins or bitcoin for the purposes of online gambling, do your due diligence and research the platform thoroughly. Look for information about the exchange's background, security measures, regulatory compliance, and user reviews. If you read that the exchange has had multiple hacks and not returned funds to users, then walk away as fast as you can.
- Check for licensing and regulation: Check if the exchange is licensed and regulated by a reputable regulatory body, such as the Financial Conduct Authority (FCA) in the UK, the Securities and Exchange Commission (SEC) in the US, or the Australian Securities and Investments Commission (ASIC). Many exchanges like Binance operate offshore so they are not as tightly regulated as exchanges like Kraken or Coinbase.
- Is The Exchange Anti-Gambling: Some exchanges closely monitor your transactions and watch where the crypto is going and coming from. If you send money you won on a sportsbook or poker room directly to the exchange, they might close your account. Exchanges like Coinbase that are heavily regulated are usually more strict about stopping their users engage in online gambling that offshore exchanges like Binance.
- Two-factor authentication: A reputable exchange should offer two-factor authentication to protect your account from phishing attacks or hacks. This can include text message verification or the use of authenticator apps like Google Authenticator or Authy. This prevents your account getting easily hacked and your bitcoin or Tether being stolen.
- Cold storage: Look for an exchange that uses cold storage to protect their customers' funds. Cold storage means that the exchange stores the majority of its funds offline, away from potential hackers. Bitfinex famously has billions stolen via a hack because they had to hold most of their funds in hot wallets due to stupid regulations.
- Reputation: Check the reputation of the exchange on forums, social media, and review sites. Look for complaints, security issues, and any other red flags.
- Fees: Look for an exchange with transparent and reasonable fees. Some exchanges charge high fees, so be sure to read the fee schedule carefully. If you win a $1,000 in Tether sports betting, you don't want a greedy exchange to take 10% of that just to convert the money to dollars or euro.
- Liquidity: An exchange with high liquidity is preferable because it will be easier to buy and sell cryptocurrency quickly and at a fair price. A big problem that smaller exchanges have is that it only takes one big seller to move the price so the price you get for your Ethereum or Bitcoin might be less that what you would receive at a major exchange like Kraken, Coinbase or Binance.
- Customer support: Look for an exchange with excellent customer support. You want to be able to contact the exchange easily and receive a timely response to any issues or questions. However, even reputable exchanges like Coinbase have a reputation for having terrible customer support but it's always a plus when someone replies to your problems in a timely manner.
- User interface: Choose an exchange with a user-friendly interface that is easy to navigate. A complex or confusing interface can lead to mistakes and lost funds. Many poker players and sports punters are not cryptocurrency traders so they are not that familiar with how the software works. It's always better to buy and sell your bitcoin and tether at an exchange that offers an easy UX for novices.