A broker is an intermediary: you hand over funds or trading decisions, and the broker executes or manages the position on your behalf, rather than you interacting with a market directly. Legitimate brokers exist under real licensing regimes — broker-dealers registered with FINRA and the SEC in the US, or authorised by the FCA in the UK — and a firm calling itself a crypto broker should be checkable against those same public registers.

The point where it goes wrong is the transfer. Once your money sits in an account a broker controls, the only thing standing behind it is that broker's licence — not the website, not the contract, not the person you have been speaking to. An unlicensed broker holds no capital it is required to hold, has no duty to keep your money separate from its own, and answers to no regulator that can make it give anything back. So there is one rule, and it comes before everything else on this page: do not send money to a broker that does not hold a licence you have checked yourself. Not a small amount to test it, not while you wait for the paperwork to arrive. If the licence is not there, the transfer is not either.

The single check that filters out the overwhelming majority of these: verify the licence yourself, on the regulator's own public register, not from a certificate or screenshot the broker supplies. In the US that's FINRA's BrokerCheck; in the UK, the FCA's Financial Services Register. Most developed markets keep an equivalent public database for exactly this reason — so a claim never has to be taken on faith.

Even a genuinely licensed broker adds a layer a direct exchange account doesn't have. Client funds sitting with a broker raise a custody question of their own — where the money actually is while you're not trading, and what happens to it if the firm runs into trouble — that doesn't arise when you hold an account directly with an exchange under its own licence and its own fund-segregation rules.

That's why, for most individual buyers, a direct account with a rated exchange is the simpler default: one licensed entity, one set of terms, no intermediary layer to separately evaluate. A broker earns its place when it offers something an exchange genuinely doesn't — access to an OTC desk for a trade too large for a public order book, for instance — not for a purchase an exchange would handle directly.

If a broker or platform can't produce a real, checkable licence number on a real regulator's register, that absence is the answer, not a detail to chase up later.