Crypto Decoded

What is a crypto exchange and how do you choose one?

A plain guide to crypto exchanges for UK readers: the difference between CEX and DEX, why FCA registration matters, and how to choose wisely.

By Oliver Crane · April 22, 2026

Your first crypto exchange is the most important decision you make in crypto. It shapes the fees you pay, the assets you can buy, and how safely your money is held.

Reviewed by Priya Nair, Editorial Director · May 17, 2026, 00:12

In this article

The short version

A crypto exchange is a platform where you buy, sell and trade cryptocurrencies. The choice matters more than most new users expect. Here is what to weigh up before you sign up to any UK crypto exchange.

Centralised exchanges (CEX) are run by companies and feel like an online broker. Decentralised exchanges (DEX) run on smart contracts and have no company in charge.
Only use a UK crypto exchange that is registered with the Financial Conduct Authority. You can check the live status on the FCA register.
Fees vary widely, especially on card deposits and withdrawals. The headline trade fee is rarely the full picture.
Security history matters. Prefer an exchange with a long track record, cold storage and clear proof of reserves.
An exchange holds the private keys to any crypto on the platform. For long-term holdings, most experienced users move coins off the exchange.

What a crypto exchange actually is

A crypto exchange is a platform where you can buy, sell and trade cryptocurrencies. Think of it loosely like a stockbroker. Instead of shares in companies, you are buying digital assets like Bitcoin or Ethereum. Most people who own crypto bought it through an exchange at some point.

The exchange sits between you and the wider market. It takes your pounds, matches you with someone selling, and credits your account with the crypto you ordered. Some platforms also offer staking and lending, but the core function is buying and selling.

There are two quite different types of exchange. Understanding the distinction is one of the most useful things you can learn early on.

Centralised and decentralised exchanges

Centralised exchanges, usually shortened to CEX, are run by companies. You create an account, verify your identity, deposit money and place orders. The exchange holds your funds and matches orders between users. Coinbase, Kraken and Gemini are well-known examples.

A centralised platform tends to be straightforward to use. It offers customer support, and it lets you deposit using a bank transfer or debit card. The trade-off is that you are trusting the company with your money and your personal data.

Decentralised exchanges, known as DEX platforms, work very differently. There is no company in the middle. Trades happen directly between users through automated software called smart contracts. The contracts run on a blockchain, and you connect your own crypto wallet to trade directly from it.

Popular decentralised exchanges include Uniswap and Curve. The benefit is that you stay in control of your assets at all times. The downsides are real. DEX platforms are more complex to use, rarely support deposits from a bank account, and offer no customer support if something goes wrong.

A DEX is also less suitable for a first-time buyer. You usually need to already hold some crypto to use one. For most people in the UK who are just getting started, a centralised platform is the practical starting point.

How to check FCA registration before you sign up

Once you have picked a centralised platform, the most important check is FCA registration. The Financial Conduct Authority is the UK’s financial regulator. Since January 2020, any business offering crypto services to UK customers has had to register.

FCA registration does not mean your funds are protected like a bank deposit under the Financial Services Compensation Scheme. It does mean the firm has passed checks on anti-money laundering controls and financial crime standards. You can verify the current status of any UK crypto exchange directly on the FCA register before opening an account.

The registration position of major firms has shifted over the years. Binance lost its FCA registration in 2021 and faced restrictions on its UK operations. Coinbase, Kraken and Gemini have maintained UK registrations. It is always worth checking the current position before you commit, since these things change.

Crypto exchange fees: what to watch for

Fees are the next thing to understand. Exchanges charge you for trades, and the way they structure those charges varies. Most operate on a maker-taker model. The fee depends on whether you are placing a new order or filling an existing one.

You will also typically pay a spread, which is a small gap between the buying price and the selling price. On top of that, watch for deposit and withdrawal fees. They can catch new users out. Some platforms charge much more for card deposits than for bank transfers.

Withdrawal fees matter too, especially if you plan to move your coins to a wallet you own. The fee can be a fixed amount per coin, and it changes depending on the network. Reading the full fee schedule before you start trading is time well spent.

Security track record and how to assess it

Security track record matters enormously. Crypto platforms have been hacked before, sometimes catastrophically. Mt. Gox, once the world’s largest Bitcoin platform, collapsed in 2014 after losing hundreds of thousands of Bitcoin to hackers.

More recently, FTX collapsed in 2022 under quite different circumstances. The failure revealed that customer funds had been misused on a large scale. Mt. Gox had well-documented operational problems, and FTX had opaque financial structures from early on.

For a deeper look at what FTX meant for retail users, see our post on what happened to FTX and how ordinary investors were affected.

When assessing a platform, look at how long it has been operating. Check whether it has had major security incidents. Look at how it stores customer funds, and prefer firms that hold the majority in offline cold storage. Check whether the firm publishes proof of reserves.

The range of assets available and the overall user experience also factor in. If you want to buy Bitcoin and Ethereum only, almost every major UK platform will serve you. If you want access to smaller altcoins, you will need to check whether they are listed. Some users end up using a regulated centralised exchange for their main holdings, and a DEX for the rest.

Custody: why “not your keys, not your coins” matters

One concept worth understanding before you trade is custody. When you hold crypto on an exchange, you do not directly own the private keys to your wallet. The exchange does. This is the difference between self-custody and exchange custody.

It is not always a problem. But if the exchange freezes withdrawals, becomes insolvent or is hacked, your access is not guaranteed. Many experienced users keep only what they plan to trade on the platform. They move long-term holdings to a hardware wallet they control directly.

The phrase you will hear often is “not your keys, not your coins”. It captures the point plainly. For the practical risk of losing your own keys, see the post on what happens if you lose access to your crypto wallet.

A worked example

Say you want to buy £500 of Bitcoin in the UK. You compare two centralised platforms.

The first crypto exchange charges 1.49 percent per trade and 3.99 percent for card deposits. The second charges 0.16 percent per trade and zero for a UK bank transfer.

On the first platform, a £500 card deposit costs you about £20 in deposit fees, and trade fees add roughly £7. That is around £27 before you own any Bitcoin. On the second platform, a £500 bank transfer costs you nothing on the deposit, and the trade fee is under £1.

That is a £26 difference on a single £500 purchase. Over a year of regular buying, the fee gap on the wrong crypto exchange easily runs into hundreds of pounds. None of this shows up on the marketing page. It only shows up when you read the fee schedule.

What this means for you

Picking your first crypto exchange is one of the more important decisions in your crypto journey. FCA registration, fees, security history and ease of use are the four things to weigh. Start with a regulated, well-established platform and you give yourself a sensible foundation.

If you only plan to buy a small amount of Bitcoin or Ethereum and hold it, almost any FCA-registered platform will do. If you plan to buy regularly, fees and deposit methods matter more. If you plan to hold for the long term, custody matters most. Learn how a hardware wallet works before you accumulate a serious position.

In plain English

A crypto exchange is the website or app you use to swap pounds for crypto and back again. The big choice is between a company-run platform and a software-only platform. For a UK beginner, a company-run, FCA-registered platform is the simpler and safer starting point.

Treat the exchange as a shop, not a vault. Anything you want to keep for the long term, take it home.