5 Best Centralized Trading Platforms in Nigeria
The 5 Best Centralized Trading Platforms in Nigeria revealed. We tested and verified the best Centralized Trading Platforms for Nigerian Traders.
This is a complete list of Centralized Trading Platforms in Nigeria.
In this in-depth guide you’ll learn:
- What is a Centralized Trading Platform?
- What are the top centralized exchanges?
- Our recommended FIVE Centralized Trading Platforms for Nigerian Beginner Traders?
- How to compare Centralized Trading Platforms against each other?
- How can I trade with $5 (2 096 NGN)?
- Which brokers offer a signup bonus on a $5 (2 096 NGN) deposit?
And lots more…
So if you’re ready to go “all in” with the best-tested Centralized Trading Platform in Nigeria…
Let’s dive right in…
What is a Centralized Exchange?
👉 Centralized exchanges allow the purchase and sale of cryptocurrencies for fiat currencies, such as the US dollar, or between digital assets, such as Bitcoin and Ethereum.
👉 They serve as trustworthy intermediates in deals and often store and secure your assets as custodians. Leading exchanges support all facets of trading digital assets, including security, fair market pricing, regulatory compliance, consumer protection, and access to various digital assets.
👉 Kraken, founded in 2011 and accessible across most of the globe, is among the most respected cryptocurrency exchanges worldwide.
👉 On its professional-grade trading platform, Kraken Pro, the San Francisco-based exchange allows investors to buy, trade, and store over 120 cryptocurrencies while charging modest fees.
👉 This advanced cryptocurrency trading platform has retained its status as the industry standard from the first days of the cryptocurrency market.
👉 Kraken provides two platforms: its primary trading platform and Kraken Pro, its professional platform. The Pro interface of the exchange offers highly configurable chart analysis capabilities, full visibility into the order books, 13 order types, and rapid execution.
👉 Kraken facilitates margin trading in cryptocurrencies and the execution of crypto derivatives trading methods in addition to traditional spot trading.
👉 While direct purchase costs on Kraken’s primary platform are up to 1.5%, Kraken Pro fees are cheap. Kraken Pro’s tiered cost structure enables high-volume traders to save money on trading expenses.
👉 Kraken Pro’s maker costs begin at 0.16% for traders with 30-day volumes below $50,000, while the taker fees begin at 0.26% for traders over $50,000.
👉 However, for traders with 30-day rolling volumes of more than $10 million, maker costs may decrease as low as 0%, while taker fees can drop as low as 0.10% of the total transaction value.
👉 When you join with Kraken, the process is like signing up for a stock brokerage account or another cryptocurrency exchange. If you have all your information on hand, it simply takes a few minutes to activate your account.
👉 During the registration process, you will be required to enter several pieces of contact information, such as your name, address, phone number, and Social Security number. This information is required under know your customer (KYC) regulations in the banking sector.
👉 To validate your account and access all trading capabilities, you must submit a copy of a government-issued photo ID and a photograph of yourself holding that ID. Without providing this information, account functionality is severely restricted.
👉 In addition, Kraken has restricted financing alternatives, with wire transfers being its customers’ principal payment method. The ACH transfer method is not supported. Support is accessible through live chat, phone, and email.
Pros and Cons
|✔️ PROS||❌ CONS|
|Kraken has low and competitive fees||Funding can be tedious and time-consuming|
|There are several built-in security features on the app|
|There is a wide range of crypto trading options offered via the app|
👉 Gemini, launched by Tyler and Cameron Winklevoss in 2014, distinguishes out for its focus on security and compliance.
👉 The New York-based exchange offers insurance for hot wallets to safeguard customer assets in case of a security compromise. In addition, users must undergo an identity verification procedure to limit the likelihood of fraud.
👉 Gemini also encourages customers to use two-factor authentication to protect their accounts and allows checking and authorizing login devices. In addition, Gemini is SOC 2-certified, meaning that independent auditors have validated the company’s security and compliance frameworks.
👉 Gemini was designed with sophisticated traders in mind, and it offers a trading dashboard that is of a professional standard. It also supports over 75 different digital currencies and tokens.
👉 Gemini also allows its customers to pay for products and services using cryptocurrency and a cryptocurrency reward card.
👉 Gemini’s primary and active trader platforms’ fee structures are distinct. The major platform imposes fixed fees on smaller transactions and a very hefty 1.49 percent on deals above $200.
👉 The active trading platform imposes maker-taker fees of up to 0.4%, which decrease as volume increases. These are also expensive. Nonetheless, the hefty charge may be a minor amount to pay, given Gemini’s immensely powerful protection.
👉 Traders and investors that like trading on a highly secure platform will value Gemini’s services. In addition, Gemini is a good option for novice crypto investors because of its user-friendly interface and extensive library of instructional materials.
👉 Expert cryptocurrency traders will find the crypto exchange’s security options, trading interface, and yield-earning Gemini Earn feature appealing. However, Gemini is the best place to do it if you are just getting started with cryptocurrency.
👉 Anyone may dabble in cryptocurrency with the help of its user-friendly software and the instructional tools provided by Cryptopedia. Still, the fee structure for transactions executed on exchanges other than its sophisticated trading platform can soon become complex and expensive.
👉 ActiveTrader is Gemini’s professional crypto-trading platform with extensive charting features and several crypto-to-crypto trading alternatives.
👉 This alternative may appeal to a subset of skilled traders seeking enhanced security, anonymity, or reduced trading expenses. In addition, Gemini Earn enables you to earn interest on a portion of your cryptocurrency holdings, like how you would earn interest on a savings account.
👉 With this service, you can put your cryptocurrency to work by lending it to institutional investors for an annual income (APY) of up to 8.05%.
Pros and Cons
|✔️ PROS||❌ CONS|
|Gemini offers a broad range of cryptocurrencies||The fees are much higher than on other exchanges|
|There is site insurance offered against exchange hacks|
|Gemini offers its services to traders from around the world|
👉 Binance is the world’s biggest cryptocurrency trading platform. However, due to its extensive array of trading choices and capabilities, it is not especially user-friendly. As a result, Binance might have a high learning curve for investors, depending on their level of expertise and education.
👉 Binance provides access to hundreds of different cryptocurrencies and a plethora of market charts through its desktop and mobile dashboards. In addition, futures and options trading, along with various other orders, are all available to users.
👉 Like other prominent exchanges, Binance makes it simple for Nigerians to purchase and sell cryptocurrencies. There are two primary methods, Basic Verification and Advanced Verification, for doing this.
👉 Binance enables traders with Basic Verification to make deposits and withdrawals using bank transfers and debit cards. In addition to making deposits and withdrawals, traders may buy, sell, and convert digital currencies.
👉 However, more seasoned investors will go towards Advanced Verification on Binance. Advanced users have the same capabilities as Basic users. However, they may also make deposits and withdrawals by wire transfer, and their credit card and bank transfer limitations are enhanced.
👉 Nigerians can also engage in staking, OTC, and API trading. Each of these buy/sell transactions incurs a 0.5% fee. In addition, Binance offers the ability to automatically purchase and sell cryptocurrencies using fiat money via a simple interface comparable to other exchanges.
👉 Until recently, Binance charged a flat 0.1% fee on spot trades, a fee structure typically associated with more advanced platform options. However, the cryptocurrency exchange has announced that it would do away with the costs associated with spot trading on crypto.
👉 This will enable customers to trade spot crypto for fiat currencies and stablecoins such as Tether, USD Coin, and Binance USD without incurring fees.
👉 Other tokens are still subject to the flat 0.1% spot trading cost, but Binance has said it intends to remove the fee soon for a larger number of tokens. In addition, Nigerian traders can utilize the Binance mobile application to maintain a position in the cryptocurrency market while traveling.
👉 The Binance mobile application is compatible with all mobile operating systems and devices. The Binance mobile app is available on Google Play for Android users and the Apple App Store for iOS users.
👉 Binance is accessible through APK files for mobile systems such as Tizen and Windows Mobile. Users get access to a vast collection of research materials that may answer any investing issue and assist them in navigating trading platforms.
👉 These articles also provide first-hand knowledge on achieving success in cryptocurrency trading. In addition, one may immediately connect with the Binance support staff and get individualized answers to their questions.
👉 The “Learn” section of the Binance trading platform educates novices through purchasing cryptocurrencies.
Pros and Cons
|✔️ PROS||❌ CONS|
|Binance is known for its ultra-low fees||Binance has some restrictions on its area of service|
|Binance offers the perfect platform for passive income|
|There are a plethora of educational resources|
|There is a massive range of coins offered|
👉 Crypto.com debuted in 2016 and has become one of the most prominent worldwide crypto exchanges. It is now accessible in 90 countries and supports over 250 coins.
👉 In addition to delivering a huge array of supported assets, Crypto.com offers a massive digital asset ecosystem comprised of its blockchain, Crypto.org Chain; a native token known as CRO; a crypto visa card; yield-generating crypto goods; and more.
👉 However, what strikes out most is the Crypto.com mobile app. While many crypto exchange mobile applications give a watered-down version of the exchange’s web-based platform, Crypto.com greatly emphasized designing an app that provides a vast array of products and services.
👉 This lets Nigerians make use of this exchange’s ecosystem on the move. In addition, app users can purchase, sell, trade, earn interest on, and pay using cryptocurrency.
👉 While Crypto.com provides an incredible number of goods and services, Trustpilot ratings from previous and current customers indicate that customer service is weak. In addition, unless you trade in larger amounts, you will wind up paying trading costs of up to 0.40 percent.
👉 Crypto.com is undoubtedly the finest choice for mobile crypto trading due to the breadth of its products and capabilities and the breadth of the assets it supports.
👉 Crypto.com has a few different features, one of which is its own cryptocurrency called Cronos (CRO). Benefits increase proportionally to the amount of CRO staked (deposited) with Crypto.com.
👉 When thinking about Crypto.com, it is easiest to think of it as a cryptocurrency bank rather than a cryptocurrency exchange or brokerage. However, the cryptocurrency exchange does allow buying and selling.
👉 Your DeFi wallet also allows you to trade them with other users. Plus, a prepaid Visa card is a terrific way to spend your cryptocurrency since it does not incur any fees when used to make purchases.
👉 In certain countries, you can even receive a loan using cryptocurrency, pay in crypto, invest your cash, and receive interest on your investment.
Pros and Cons
|✔️ PROS||❌ CONS|
|Nigerians can make VISA payments through the app||The fees for credit and debit card purchases are high|
|There are several trading options offered to Nigerians||There is no coin-to-coin trading offered|
|The fees charged on the app are reasonable|
👉 Launched in Hong Kong in 2017, the popular cryptocurrency trading platform KuCoin aims to provide users with a secure and user-friendly environment to transact in any of the 600+ cryptocurrencies it supports.
👉 With a user base that has grown to over 11 million in just 5 years, serving one in four crypto holders worldwide, it has significantly impacted the global crypto community. In addition, KuCoin’s trading costs are on pace with the market leader, Binance, making it a highly attractive option.
👉 Additionally, investors may get a rebate depending on their monthly average KCS holdings or their trading volume from the preceding month. Using KCS to make payments, they can save an extra 20% on all fees.
👉 KuCoin, like many other cryptocurrency exchanges, employs a maker/taker fee structure, whereby you are charged a different fee depending on whether your order is a maker or a taker.
👉 By placing additional open orders for the market to fill, “makers” increase the exchange’s overall liquidity. Meanwhile, by fulfilling maker orders, takers dwindle available funds.
👉 You will not know the specifics of your expenses until you place your purchase and find out if it is a maker or a taker.
👉 KuCoin has an Ethereum-based token, the KuCoin Token (KCS). Users who hold KCS are eligible for reduced trading fees and a daily distribution of a portion of KuCoin’s trading fee revenue. To participate, users must have a minimum of six KCS tokens.
👉 While KCS is a nice benefit of the KuCoin platform, users should be aware that KCS is a very volatile cryptocurrency and that the value of their KCS is not guaranteed.
👉 When it comes to the number of tradable assets it supports, KuCoin is unrivalled. It has been called “the platform that allows users to generate income with a profusion of services and goods,” too.
👉 Risks connected with trading digital assets are reduced thanks to the site’s safety safeguards and security components. In addition, the platform provides complete trading options, including automated trading robots and sophisticated API options for improved trading tactics.
👉 KuCoin also has a margin trading platform that allows investors to borrow crypto from other investors to increase their leverage. KuCoin’s (KCS) KuCoin Token, Bitcoin (BTC), Ethereum (ETH), and other cryptocurrencies are often utilized for this kind of transaction.
👉 The platform where Nigerians can trade contracts or futures for Bitcoin is called KuMEX. Users could purchase and sell future standard contracts for the assets using this platform.
Pros and Cons
|✔️ Pros||❌ Cons|
|KuCoin offers an attractive selection of cryptocurrencies that can be traded.||KuCoin is not licensed in all areas.|
|There are competitive trading fees and Nigerians get volume discounts on their fees.||Funds are kept on the platform and there is no insurance on these funds.|
|There are advanced features offered like margin trading as well as futures trading.||KuCoin experienced a successful hack in 2020.|
|Credit and debit cards are accepted for crypto purchases.|
How to choose the Right Centralized Trading Platform in Nigeria
👉 The need for Bitcoin brokers has grown because of the thousands of individuals interested in investing in cryptocurrencies globally.
👉 Numerous Bitcoin brokers will be offering their services on the market, but you will also run across reports of frauds involving Bitcoin brokers.
👉 Not all Bitcoin brokers can be trusted since many of them have turned into frauds. Even if they are, they lack adequate security measures or are deficient in certain key areas, which may cause a lot of issues for Bitcoin traders.
👉 You must thus carefully choose a crypto broker, and we have provided key features that you must verify before you deal with a crypto broker.
Background and Financial Backing
👉 A good Bitcoin broker has robust financial support, which necessitates a substantial capital basis. This ensures that your Bitcoin is secure and that the broker will not go bankrupt.
Experience and Credibility
👉 The crypto market is young compared to other markets. However, this does not imply that all brokers are unskilled. There are reputable and professional Bitcoin brokers available for usage.
👉 Bitcoin brokers must possess the necessary qualifications, such as licenses from famous and respectable regulatory authorities and specialists on their staff. You can read reviews of the broker and get insight into their services to assess whether they are a good match for you.
Responsive Customer Support
👉 Since Bitcoin trading is available 24 hours a day, seven days a week, you could have a problem or query at any moment.
👉 Therefore, it is important to seek a broker who is accessible 24/7. Regardless of your time zone, they should have a competent support crew that can respond to inquiries and concerns in a timely and professional way.
Crypto Trading Fees and Commissions
👉 You must investigate the commissions and other costs that Bitcoin brokers impose. Ensure the broker outlines the fees they charge, and any other dangers associated so that you may make an informed choice.
👉 No Bitcoin broker is complete without a user-friendly web, desktop, or mobile platform, often all three. These platforms are required for an assortment of reasons.
👉 They give customers a great degree of simplicity in Bitcoin trading, and a well-designed platform provides them with a variety of possibilities.
👉 These choices make things easier and more comfortable for novice and seasoned Bitcoin traders alike. Ensure that your preferred dealer has a modern platform or a selection of platforms.
Longevity of brokerage
👉 There may be a small number of trustworthy Bitcoin brokers that have just started up, but they are quite rare. If a Bitcoin broker has been in existence for an extended length of time, it has been doing something right, as shown by the fact that customers continue to depend on it.
Account Registration Process
👉 Very few traders realize that the registration procedures of Bitcoin brokers reveal a great deal about their character. Veteran traders in this industry can rapidly determine if a broker is excellent or terrible based just on the sign-up procedure.
👉 You may initially have some problems with spotting the legit Bitcoin brokers. However, as time goes by, you will have a better time distinguishing between excellent and unfavourable brokers. A vast number of depositing fees is a frequent indicator of a fraudulent sign-up procedure.
👉 Most instances in which Bitcoin brokers urge their customers to deposit a big sum of money to join up are probable scams. This is made apparent by the fact that many reputable Bitcoin brokers now accept little or no deposits from prospective clients.
👉 You should opt for these Bitcoin brokers instead of those that want vast quantities of money for crypto transactions.
👉 Additionally, investigate the process’s security. You can do this by examining the search bar’s top-left corner for an SSL certificate. This certificate ensures that a website is secure and will not expose your data to hackers.
Technical Support for Cryptocurrencies
👉 The distinction between customer service and technical assistance cannot be overstated. Most firms have technical support teams to assist clients with issues that need assistance from experts in that field.
👉 A significant majority of Bitcoin brokers lack any form of technical support personnel. They believe that their customer service professionals are sufficient for the task and depend only on them.
👉 The team should comprise Bitcoin industry veterans with decades of expertise. They should have a thorough understanding of how things operate and be able to deliver rapid answers within minutes.
👉 Determining whether a Bitcoin broker has a competent technical support staff might consume considerable time. In most instances, a substantial bit of trial and error is required.
👉 If a Bitcoin broker does not provide any convenience, they are not worth your time. As the environment changes, this sector is undergoing tremendous change. To make the appropriate judgments at the right time, you must be current on many matters.
👉 This is only achievable if your broker provides you with features that enhance your entire experience. Your broker’s platform should be compatible with a range of devices.
👉 Using your smartphone or tablet, you should be able to access your account and see all your trades and other crypto-related actions.
👉 Easy accessibility enables you to trade on the move while guaranteeing that you do not miss anything crucial and aside from that, the broker should utilize straightforward language.
The Best CFD Brokers in Nigeria
👉 In this article, we have listed the best brokers that offer CFD trading to traders in Nigeria. In addition, we have further identified the brokers that offer additional services and solutions to Nigerian traders.
Best CFD Broker for beginners in Nigeria
👉 Overall, AvaTrade is the best CFD Broker for beginners in Nigeria. Furthermore, AvaTrade is the finest broker for novices due to its abundance of training resources. In addition, AvaTrade provides a beneficial practice account and an assortment of instructional and user-friendly trading platforms.
Best Low Minimum Deposit CFD Broker in Nigeria
👉 Overall, Exness is the best Low Minimum Deposit CFD Broker in Nigeria. Nigerians can easily open an account with Exness with a minimum deposit of 10 USD / 4,100 NGN. In addition, Exness provides certain instructional resources and trading tools in addition to MT4 and MT5 on several devices.
👉 Exness also provides zero-pip spreads, 278 financial products, and a commitment to the security of customer funds.
Best ECN CFD Broker in Nigeria
USD 5 / 2073 NGN
CySEC, FSC, FSCA
MetaTrader 4 and MetaTrader 5
Account Activation Time
👉 Overall, HFM is the best ECN CFD Broker in Nigeria. HFM is a MetaTrader-only broker whose trading accounts provide ECN and STP execution. Thus, Nigerians may trade EUR/USD and other important instruments from 0 pip spread and at affordable fee rates.
Best Islamic / Swap-Free CFD Broker in Nigeria
👉 Overall, XM is the best Islamic / Swap-Free CFD broker in Nigeria. XM provides an Islamic Account that ensures honest, fair, and competitive trading conditions for Nigerian Muslim traders.
👉 The application procedure is quick, and Nigerian merchants do not need to worry about extra charges or holding expenses on the Islamic Account.
Best CFD Trading App in Nigeria
USD 1 (415 NGN)
IFSC, FSCA (south africa), ASIC, CySEC
MetaTrader 4, MetaTrader 5, FBS Trader – all in one mobile trading platform.
$140 (58 116 NGNFind out More)
Account Activation Time
👉 Overall, FBS is the best CFD trading app in Nigeria. In addition, FBS is among the top STP/ECN hybrid brokers for Nigerian traders. The FBS Trader is an all-encompassing platform that links Nigerian traders to several global marketplaces.
👉 Nigerian traders may begin trading with as little as 1 USD / 400 NGN and leverage up to 1:3000 on all major instruments. There are also many deposit and withdrawal options and a 20% cashback trading incentive.
Best Naira Trading Account CFD Broker in Nigeria
12 USD / ₦5,000
Account Activation Time
👉 Overall, 7B Forex is Nigeria’s best Naira trading account CFD Broker. 7B Forex operates out of Nigeria and provides clients with the option to trade using NGN-denominated accounts.
👉 In addition, Nigerians may use the Elite Account to have access to leverage of up to 1:1000 and trade cryptocurrency CFDs.
Best Lowest Spread CFD Broker in Nigeria
👉 Overall, IC Markets is the best lowest spread CFD Broker in Nigeria. In addition, IC Markets is one of the few True ECN brokers that provide 0.0 pip spreads and fees starting at $3.5 per traded lot.
👉 Active Nigerian traders, scalpers, and algorithmic cryptocurrency traders should open a Raw Spread Account.
Best NDD CFD Broker in Nigeria
👉 Overall, GO Markets is the best NDD CFD broker in Nigeria. GO Markets is one of the leading ECN brokers with some of the best and most liquid markets. GO Markets provides qualifying traders with a free VPS and competitively cheap commissions per lot.
Best STP CFD Broker in Nigeria
400 Nigerian Naira equivalent to $1
FCA, ASIC, CySEC, EFSA, JSC
• MetaTrader 4
• MetaTrader 5
• Admirals Mobile App
35 Forex Currency Pairs
Account Activation Time
👉 Overall, Admirals is the best STP CFD broker in Nigeria. In addition, Admirals provides ECN account conditions on MT4 and MT5 for various financial markets.
👉 Spreads for Nigerians begin at 0 pips, and the average commission per transaction is 6 USD, with active traders paying as little as 3.6 USD.
Best Sign-up Bonus CFD Broker in Nigeria
USD 1 / 415 NGN
Account Activation Time
👉 Overall, InstaForex is the best sign-up bonus CFD broker in Nigeria. InstaForex provides three incentives to traders who open an account and make a deposit.
👉 In addition, a $1,000 no-deposit incentive may give Nigerians risk-free trading credit to experience the live market.
The Pros and Cons of Centralized Trading Platforms
There is protection against scandals and fraud
👉 The whole bitcoin industry exists online. However, transactions sometimes entail the use of complex language, which makes inexperienced investors uneasy.
👉 In addition, the lack of a centralized authority to give legitimacy renders the transactions dangerous and unclear. As a result, cryptocurrency investors have had their fair share of controversies.
👉 To protect themselves from such scandals, conservative investors prefer to do business using a trusted agent. In this context, centralized exchanges are considered favourably.
👉 Investors believe employing these exchanges’ services could avoid controversies since these firms have a physical presence and are controlled by the government.
Institutional clients can use them
👉 Several institutional investors want bitcoin investments for diversification purposes. However, they cannot do so since their rules prohibit them from doing business with untrustworthy parties.
👉 Centralized exchanges are crucial for these corporations since they are the only way to invest in the bitcoin markets.
CEXs are user-friendly
👉 Centralized exchanges provide novice investors with familiar, user-friendly trading and investment platform for cryptocurrencies.
👉 Unlike crypto wallets and peer-to-peer transactions, which can be complicated, users of centralized exchanges can log in to their accounts, examine their account balances, and conduct transactions using apps and websites.
They offer a service
👉 Centralized exchanges offer cryptocurrency investors an essential service. The contact centers of these exchanges are staffed with customer service representatives trained to intuitively explain cryptocurrency’s subtleties to traders.
👉 Additionally, centralized exchanges provide custody services. This indicates that the company has a dedicated infrastructure for storing digital money.
👉 These exchanges offer very safe digital vaults. In addition, some of these exchanges also provide services for offline digital currency storage on specialized hardware. These services are quite beneficial for investors who are concerned about investment security.
You can trade using leverage
👉 One of the additional benefits of certain CEXs is the ability to leverage your investments by borrowing money from the exchange. This practice is known as margin trading. This enables investors to earn greater profits, but it also magnifies losses.
There is often insurance on funds
👉 Cryptocurrency exchanges are aware that regardless of how advanced their security is, they are susceptible to digital assaults. The money at a cryptocurrency exchange is insured for this reason. However, providing such insurance does incur an extra expense.
👉 However, it provides peace of mind to investors who may be continually concerned about the threat of digital assaults.
These exchanges offer investing tools
👉 Additionally, centralized cryptocurrency exchanges provide services with extra value. These services include charting tools that provide investors with structured information and facilitate decision-making.
There are limited options offered
👉 In CEX markets, investors sacrifice diversity for safety. Therefore, on most centralized exchanges, just 40 to 50 crypto assets are accessible for trade.
👉 This represents a tiny portion of all coins in the crypto realm. Moreover, since these exchanges are particularly concerned about their image, only reputable coins are permitted to be listed. Nonetheless, this decreases the number of available trading possibilities.
👉 Because most of the growth over the last few years has come from younger cryptocurrencies, fewer alternatives also have an economic effect.
There are higher transaction fees
👉 In contrast to peer-to-peer transactions, centralized exchanges often charge hefty transaction fees for their services and convenience, which may be particularly exorbitant when exchanging large quantities.
There are often stringent regulations
👉 Regulators can grant licenses to centralized exchanges. Consequently, companies must adhere to stringent government regulations. Some of these exchanges have Know Your Customer (KYC) standards equal to those of large banks.
👉 Centralized exchanges interact with several regional and national government entities. These agencies may also access the data at these exchanges. For many investors who want privacy, these stringent laws are a deal-breaker.
CEXs have custody of assets
👉 Instead of allowing you to keep your private keys in your digital wallet, most CEXs will maintain your digital asset as a custodian in their native exchange wallet.
👉 While trading on a centralized cryptocurrency exchange is more convenient, there are disadvantages, including the chance of the exchange collapsing and the possibility of fraud.
There is always the risk of bankruptcy
👉 Likewise, centralized exchanges are private companies. Consequently, the money in their possession is a loan from an investor. There is always a risk of default whenever there is a debt. However, there have been no reports of the insolvency of any exchange yet.
👉 There is always the potential that this may occur in the future. Investors that use these centralized cryptocurrency exchanges incur the danger of experiencing a financial loss because of these bankruptcies.
There are risks that the exchange will be hacked
👉 Centralized exchanges are managed by firms accountable for their consumers’ assets. As a result, large exchanges often house bitcoin worth billions of dollars, making them a target for hackers and thieves.
👉 A single entity operates centralized cryptocurrency exchanges (CEX). Centralized exchanges facilitate entry into cryptocurrency trading by enabling users to transfer fiat currencies, such as Naira, directly into cryptocurrencies.
👉 Even though CEX exchanges offer benefits, trading cryptocurrencies via them remains dangerous. Therefore, before selecting an appropriate CEX, Nigerian traders must comprehend their specific trading requirements and goals.
Are centralized crypto exchanges safe for Nigerians?
Centralized crypto exchanges are safe regarding regulations, but they are not safe when hackers often target them.
Is it better for Nigerians to keep their crypto in a wallet or exchange?
Nigerians must only keep operational funds they use for trading on an exchange and keep the bulk of their funds in offline storage.
Is Binance centralized or decentralized?
Binance is a centralized exchange.
Are centralized exchanges better?
Centralized exchanges are a good starting point for beginners until they are more experienced.
Do I need a crypto wallet?
Yes, it would help if you always had your own crypto wallet where you could keep most of your funds. However, do not transfer all your funds to your crypto exchange, as hacks can happen, even to exchanges that have never had security breaches.