For several years following the creation of Bitcoin, the act of trading cryptocurrencies for profit was fraught with danger, both from a legal and extralegal standpoint. Now, over ten years on from the birth of Satoshi Nakamoto’s groundbreaking invention, cryptocurrency trading has entered the mainstream, where it is protected by the same kind of legal mechanisms that accompany traditional trading markets.
As such, first-time cryptocurrency traders can now operate on exchanges that have gained full regulatory compliance with US lawmakers. While renegade exchanges continue to operate outside the purview of US regulations, these platforms now find their days to be increasingly numbered, as witnessed by the recent criminal charges leveled against the executives in charge of BitMEX exchange.
While the judicial system deliberates on the future of BitMEX and its associates, here are five fully compliant US cryptocurrency exchanges where you can trade without fear of running foul of the law.
Founded in 2012, Coinbase has since emerged as one of the most well-known trading platforms in the cryptocurrency space. Coinbase is licensed to operate in Canada, the UK, Europe, and the vast majority of US states (excluding Hawaii).
Coinbase has gained a reputation as a good first point of contact for new entrants to the cryptocurrency space, helped by its easy-to-use, intuitive interface, and responsive customer support.
Trading fees on Coinbase’s main platform have drawn criticism from the crypto community for being excessively high, however this is generally seen as the accepted cost of utilizing Coinbase’s simplified services.
For those traders who are experienced enough to operate order books by themselves, the associated Coinbase Pro platform offers greatly reduced trading fees, while putting more responsibility on the end user.
Gemini is a New York-based cryptocurrency exchange founded by the Winklevoss twins in 2015, and was the first platform to gain an official license to trade Ethereum (ETH) in 2016.
For years Gemini only offered access to the two largest cryptocurrencies by market cap, Bitcoin and Ethereum. This preference to exercise extreme caution over listing any more of the world’s 7,000+ digital assets greatly boosted the perception of Gemini’s security, while at the same time limiting its trade volume to levels much lower than its major competitors.
As of 2020, however, Gemini has opened its doors to several more major cryptocurrencies, including Bitcoin Cash (BCH) and Litecoin (LTC), as well as privacy coin Zcash (ZEC), and the defi (decentralized finance) sensation, Chainlink (LINK).
Founded in 2018, CoinZoom is an institutional grade cryptocurrency exchange that is fully licensed to operate in the US. CoinZoom is registered as an MSB (Money Services Business) in 50 states, and is legally recognized as a Money Transmitter in all but two US jurisdictions (New York and Hawaii).
As one of the small handful of exchanges to be granted full regulatory compliance on US soil, CoinZoom finds itself competing head on with the likes of Coinbase, Gemini, and Kraken. Building on the services offered by its competitors, CoinZoom recently became the first US exchange to offer an integrated Visa debit card, allowing customers to spend their cryptocurrencies at over 53 million merchants worldwide, while also earning cashback of up to 5% in the form of its native ZOOM token.
The CoinZoom team has previous experience operating in conjunction with the US Commodities and Futures Exchange Commision – its CEO, Todd Crosland, founded Interbank FX, LLC (“IBFX”), a Futures Commission Merchant and Retail Foreign Exchange Dealer.
bitFlyer has the unique distinction of being the only cryptocurrency exchange licensed to operate across the board in the US, Europe, and Japan. It grew to become the largest venue for cryptocurrency trading in Japan, after being the first from the East Asian nation to gain a BitLicense.
Founded in 2013 by Yuzo Kano and Takafumi Komiyama - both formerly of Goldman Sachs - bitFlyer is registered in 46 US states, including Washington DC. It was the first cryptocurrency exchange to broadcast a TV commercial in the US, and as of 2017, was the largest trading platform by volume worldwide.
bitFlyer provides secure access to a wide range of cryptocurrencies including Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ethereum Classic, and more. BitFlyer intends to list more digital assets in the near future, and aims to reduce the onboarding process (turning fiat to crypto) to less than ten minutes.
Rounding up this list is Kraken, a US registered cryptocurrency exchange that was founded in 2011, and has since expanded into over 170 countries worldwide. Kraken is currently licensed to operate in 46 US states, and offers access to over 40 cryptocurrencies at time of writing.
Rather than simply provide a secure, legally authorised trading platform for cryptocurrency users, Kraken aims to accelerate the rate of crypto adoption worldwide – a goal which Kraken states will help the world achieve financial freedom and inclusion.