What is a UK crypto exchange?
A UK crypto exchange is the platform where traders and investors can buy, sell, and trade a variety of cryptocurrencies. An exchange facilitates trading between buyers and sellers for a fee, which is their primary source of revenue.
Crypto exchanges in the UK are obliged to comply with regulations established by the Financial Conduct Authority (FCA).
Characteristics of the best crypto exchanges in the UK
- Compliance with FCA regulations. We only list exchanges that are licensed or regulated by the Financial Conduct Authority (FCA) in the UK.
- Low fees. Not only should a good crypto exchange have competitive fees, but any fees should be transparent and easy to understand for traders of all levels.
- Choice. Not everyone wants to buy and sell Bitcoin alone. The best crypto exchanges list the top coins but also stablecoins such as USDT and USDC, along with upcoming altcoins like Dogecoin, XRP, Cardano, Solana, and Polygon, among others.
- Security built in. We are looking for robust security measures including cold storage and 2FA as standard. Some exchanges have depositors' insurance, which protects your assets in the event the exchange faces issues with liquidity or gets breached. Ideally, an exchange should have the option to store your crypto tokens on your own hardware wallet instead of the exchange's "hot" wallet.
- Proof of Reserves (PoR). A means of verifying that an exchange holds enough assets to cover their users' deposits.
- Customer support. Prompt and effective resolution of user queries and issues is a given.
- Convenient deposit and withdrawal options. Availability of multiple methods for GBP deposits and withdrawals, ideally with low fees for both.
- Excellent user experience. Suffice to say that some crypto exchanges are not designed well. We list those with an intuitive interface that caters to both novice and experienced traders.
- Social or copy trading. Popular with beginners, this is a way to trade crypto automatically by following the trades of someone else.
- Available as a native app. Crypto exchanges are generally available as an app for iOS and Android, although some are implemented better than others.
- Transaction speed. Crypto moves fast. Exchanges should process orders, deposits, withdrawals, and trades efficiently to avoid slippage.
- Tax friendly. If the exchange doesn't provide tax reports for HMRC (His Majesty's Revenue & Customs), it should integrate with a dedicated crypto tax service or generate statements for easy import.
Types of crypto exchanges in the UK
- Centralised exchanges (CEXs). Known for their liquidity and extensive cryptocurrency listings. Binance and Coinbase are examples. Typically more beginner-friendly.
- Decentralised exchanges (DEXs). These non-custodial platforms allow direct, peer-to-peer transactions over the blockchain. Uniswap and PancakeSwap are major players. They're generally less beginner-friendly.
- Hybrid exchanges. These merge the benefits of both centralised and decentralised platforms, delivering security alongside a broad range of services. KuCoin and Crypto.com are examples.
Is the UK a crypto-friendly country?
The UK has a cautious approach to crypto. While it allows crypto trading, the FCA has banned the sale of crypto derivatives to retail consumers. It also continues to tighten up reporting and standards for what it calls "cryptoasset" businesses.
How can I cash out my cryptocurrency in the UK?
Use a crypto exchange offering fiat withdrawal options. Sell your cryptocurrency for GBP and then transfer the funds to your bank account.
Is trading cryptocurrency legal in the UK?
Yes, cryptocurrency trading is legal in the UK, but the sale of crypto derivatives to retail consumers is banned.
Can foreigners buy cryptocurrency in the UK?
Yes, both foreigners and residents can engage in cryptocurrency trading in the UK.
What deposit methods are generally supported?
Bank transfers and credit/debit cards are the primary methods to deposit funds on a UK crypto exchange.
What are the typical fees involved?
Fees vary between exchanges, but generally encompass trading fees, deposit fees, and withdrawal fees.