The picture in three lines
- Start with the licence: find the firm on the regulator's own register and confirm the website domain matches the entry.
- Then check where your money and coins are held, what every cost is and how withdrawals work in practice.
- Any firm that pressures you, promises returns or asks for remote access fails the test, whatever its website claims.
How to choose a broker or a crypto exchange is less about finding the perfect platform and more about ruling out the unsafe ones. ArkonBit does not rank or recommend real firms; instead, this page gives you the checks we would run ourselves. They apply to forex and CFD providers, stockbrokers and crypto platforms alike, with notes where the three differ.
Checks 1 to 3: licence, entity and protection
1. Find the firm on the regulator's register
Search the official register of the regulator in your country, such as the UK Financial Conduct Authority's Financial Services Register. Look for the legal entity name, the permissions it holds and the website domains listed. Do not rely on a licence number printed on the firm's own site; clone firms copy real numbers.
2. Match the entity to your account
Groups often run several companies in different countries. The one that would hold your account may be registered somewhere with far weaker rules. The client agreement names the entity; read that line.
3. Understand what protection applies
Ask whether client money is segregated, whether retail clients have negative balance protection, and whether a compensation scheme covers the firm. For crypto platforms in the EU, check whether the firm is authorised under MiCA as a crypto-asset service provider.
Checks 4 to 6: custody, product and costs
4. Where are assets held?
For shares, ask about nominee accounts and the custodian. For crypto, ask whether coins are held one-to-one, whether the platform lends them out and whether it publishes proof of reserves together with its liabilities. Reserves without liabilities tell you little.
5. Is it the real asset or a derivative?
Buying a share and buying a share CFD look the same in many apps. So do buying bitcoin and opening a bitcoin contract. The difference changes ownership, costs and risk. Our trading apps comparison shows how to spot it.
6. Add up every cost
Spreads, commissions, overnight financing, currency conversion and withdrawal fees all count. A low headline fee can hide a wide spread. Two illustrative fee schedules for one standard lot of EUR/USD, round trip:
Illustrative cost per standard lot, EUR/USD round trip
At $10 per pip: A = 0.9 × $10 + $7 = $16; B = 1.6 × $10 = $16. The cheaper option depends on the actual spread you receive.
The detail is in our guide to hidden trading costs.
Checks 7 to 8: withdrawals and platform safety
7. Read the withdrawal rules before you deposit
Look for minimums, fees, processing times and any condition that links withdrawals to trading volume. Legitimate firms return money to the source it came from and verify identity; they do not demand a "tax" or "release fee" before paying out. For crypto, check which networks are supported for each coin.
8. Check account security
App-based two-factor authentication, withdrawal address allow-lists and login alerts are basic features. A platform that offers only SMS codes, or none, leaves you more exposed.
Checks 9 to 10: complaints and behaviour
9. Know where complaints go
A regulated firm must explain its complaints process and, in many countries, which independent ombudsman or dispute body you can escalate to. If there is no route beyond the firm itself, that is a serious gap.
10. Watch how the firm behaves
Genuine firms do not cold-call with investment offers, promise returns, offer bonuses to retail CFD clients in the UK, EU or Australia, or ask to install remote-access software on your device. Any of those is enough to walk away.
Two extra tests that cost almost nothing
The support test. Before depositing, ask customer support two specific questions in writing: which legal entity would hold your account, and what the total cost would be for a trade you describe. A clear, prompt, written answer is a good sign. Vague replies, pressure to deposit first or an immediate offer of a personal "account manager" are not.
The history test. Check how long the firm has held its licence, whether the regulator has published any enforcement notices about it and whether its name has changed recently. A long record is not a guarantee, but a very new firm with an old-looking website deserves extra care.
How to choose a broker: the ten checks on one page
| # | Check | Pass looks like |
|---|---|---|
| 1 | Regulator register | Firm, permissions and domain all listed |
| 2 | Contracting entity | Same entity as the licence you checked |
| 3 | Protection | Segregation, negative balance protection, known scheme |
| 4 | Custody | Clear custodian or one-to-one crypto holdings with liabilities disclosed |
| 5 | Product type | You know whether you own the asset or a contract |
| 6 | Total cost | All fees published and added up |
| 7 | Withdrawals | Published rules, no volume conditions or release fees |
| 8 | Security | App-based 2FA and withdrawal allow-lists |
| 9 | Complaints | Written process and an independent escalation route |
| 10 | Behaviour | No cold calls, promises, bonuses or remote access |
Once you have a shortlist, a small first deposit followed by a small withdrawal is a practical test of check 7. It costs little and reveals a lot.
Reading the client agreement in fifteen minutes
Client agreements are long, but a few sections carry most of the weight. Search the document for these words and read the paragraphs around them.
- "Entity" or "counterparty": which company you are actually contracting with, and in which country.
- "Client money" or "safeguarding": how your cash is held and what happens if the firm fails.
- "Rehypothecation", "lending" or "staking": whether the firm may lend out or use your assets.
- "Inactivity", "dormant" or "maintenance": fees charged when you are not trading.
- "Suspend", "freeze" or "terminate": when the firm can stop you withdrawing, and what notice it must give.
If a firm does not publish its client agreement before you sign up, treat that as a failed check in itself.
When it is time to leave a platform
Checks are not only for the start. Revisit them if a platform changes its terms at short notice, if withdrawals slow down without explanation, if its licence status changes on the regulator's register, or if support starts asking you to deposit more before it will process requests. Moving funds away early costs a little in fees and time; waiting too long has cost platform users far more. Keep your own records of deposits, trades and correspondence, so you have evidence if you ever need to complain.
Differences for crypto platforms
Crypto platforms add their own questions. Does the platform support withdrawals to your own wallet? On which networks? Does it publish proof of reserves with liabilities? Is it authorised where you live, or simply accessible from there? A platform that is merely reachable from your country may owe you very little if something goes wrong. Pair this checklist with our USDT network guide and the scam patterns.
Short answers
How do I know if a broker is regulated?
Search the regulator's own online register, not the firm's website. Confirm the legal name, permissions and website address match, and check the regulator's warning list for clones.
Is an offshore licence good enough?
Some offshore regulators impose far fewer requirements on client money, leverage and complaints. Check which protections apply to you, not just whether a licence exists.
Does ArkonBit recommend any broker or exchange?
No. ArkonBit is an information site, not a broker or exchange, and it does not rank or recommend real firms. The checks on this page are there so you can assess them yourself.
Sources
- UK Financial Conduct Authority, Financial Services Register and Warning List
- European Securities and Markets Authority, CFD product intervention measures
- Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA)