Cryptocurrency Donations Pour Into Ukraine. This Week in Bitcoin and Crypto News

Cryptocurrency Donations Pour Into Ukraine. This Week in Bitcoin and Crypto News

Welcome to Nonfungible Tidbits. Our focus this week: Russia's war in Ukraine. 

In addition to uprooting the lives of Ukrainians and throwing the international order into chaos, the Russian invasion has created a proving ground for some of the most ambitious -- and cynical -- use cases for cryptocurrency. On the one hand, crypto has become a tool for individuals and organizations to provide charitable support and donations to Ukrainians (as well as a new frontier for online scammers). But there are reports of Russian oligarchs using the technology to evade an increasingly aggressive bevy of financial sanctions. We'll also look at the sale of an NFT of the Ukrainian Flag to support Ukraine -- a project backed by a member of the Russian punk band PussyRiot. 

Our other stories include scams trying to exploit donations to Ukraine, and how some cryptocurrency exchanges are handling the sanctions against Russia. 

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Cryptocurrency donations worth millions raised for Ukraine 

More than $50 million in cryptocurrency has been raised for Ukraine in the time since Russia began military operations in the nation last week. Many of these donations have been made directly to the Ukraine government. Mykhailo Fedorov, Ukraine's minister for digital transformation, tweeted wallet addresses for cryptocurrency donations, which was also tweeted by Ukraine's official twitter account. Over $47 million in cryptocurrency has been donated in this way, says Elliptic, a blockchain analysis firm.

Read CNET's full story on how Ukraine raised bver $55M in crypto to help resist Russia .

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NFT backed by a member of Russian punk band PussyRiot raises $6.7 million for Ukraine

Aside from direct donations to the Ukrainian government, UkraineDAO, an online organization backed by a member of the Russian punk rock group PussyRiot, has raised millions by auctioning a Ukrainian flag sold as an NFT. Contributors were able to share ownership of the NFT, and 3,200 individual contributions took place in 72 hours for a total of $6.7 million in ether.

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Scammers trying to exploit the war in Ukraine

If you want to donate to help Ukrainians, it's good to be aware of scams on social media that are using the war in Ukraine for illicit gain. These scams can take the form of fake charities and other organizations claiming to support Ukrainians. Especially when it comes to cryptocurrency, anyone who wants to donate should be careful, as cryptocurrency transactions are generally irreversible and difficult to track. If you're inclined to donate, check out CNET's list of charities and make sure you do your research first.

Read CNET's full story on how war in Ukraine brings out scammers trying to exploit donations.  

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Cryptocurrency exchanges don't want to bar users in Russia

While the White House hasn't yet commented on this directly, Bloomberg reports the Biden administration has asked cryptocurrency exchanges to prevent Russian people and organizations from using virtual currencies to circumvent Washington's sanctions. Bloomberg cites a White House official saying that American authorities are aggressively fighting any misuse of digital assets to avoid sanctions. Reuters reports that Binance, as well as US-based Coinbase and Kraken have agreed to screen users and block anyone targeted by sanctions, but the exchanges have stopped short of banning all Russian clients. Binance and Coinbase are the two largest cryptocurrency exchanges in the world by market cap.

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• Cash Donations To Ukraine
• How To Get Cryptocurrency Donations
• Donating Cryptocurrency To Charity
• Cryptocurrency Donations To Nonprofits
• Donate Crypto To Charity
• How To Accept Cryptocurrency Donations
• Charitable Donations Of Cryptocurrency

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Top Reasons the IRS Could Flag Your Tax Return

Top Reasons the IRS Could Flag Your Tax Return

This story is part of Taxes 2022, CNET's coverage of the best tax software and everything else you need to get your return filed quickly, accurately and on-time.

According to the IRS website, an audit is simply a review of accounts and financial information "to ensure information is reported correctly according to the tax laws and to verify the reported amount of tax is correct."

But many taxpayers live in fear of being audited or receiving any sort of feedback from the IRS other than a confirmation (or refund). Audits can be triggered at random, but certain kinds of taxpayers -- and certain behaviors -- are more likely to raise red flags with the agency.

Below, we've spoken with tax experts about the chief mistakes people make that generate more scrutiny from the IRS. We'll also explain what you can do to avoid making errors and how far back into your records the agency will look.

1. You have missing or mismatched paperwork

"There's no one single thing that automatically triggers an audit," said Jo Willetts, director of tax resources at Jackson Hewitt, "but mismatched documentation is the most common reason why you'll get a letter from the IRS."

It can be as simple as a missing form, she said, "and often it happens to people who rush around at the last minute." 

Last year the federal government offered a variety of financial support programs to offset the economic effects of the pandemic, notably the child tax credit, the earned income tax credit, a third stimulus check and the American opportunity tax credit, which allows you to claim up to $2,500 in education expenses.

But you have to show you legitimately qualified for these benefits, Willetts told CNET. 

"If, last year, you claimed no child tax credit and this year you claimed three kids and they're not babies, it's going to trigger a letter from the IRS," she said.

That doesn't mean you're always in the wrong: You might have had a child in May 2021, and the IRS is working off information it has on you from 2020. 

While the EITC is aimed at lower-income households, taxpayers who claim it are among the most likely to be audited, accounting for nearly 31% of all audits over the past 10 years, according to a 2021 report from the US Treasury Department (PDF).

That's because fraud is so rampant, according to the IRS: Some $16 billion, or 23.5% of EITC payments, were improperly paid in fiscal year 2020.

2. You made a mistake with the math or data entry

While simple math errors won't usually trigger a full-blown examination by the IRS, they will garner an extra look and slow down the completion of your return, even if the error is in the IRS' favor.

So can entering your Social Security number wrong, transposing the numbers on your address and other boneheaded blunders.

Filing electronically cuts down on these foul-ups by pulling a lot of information from previous returns and letting you load your W-2s or 1099s directly into the system.

Using a professional tax preparer is also a good bulwark against mistakes and miscalculations.

3. You're self-employed

"If you work for yourself and have legitimate business expenses, you should feel empowered to take them," said Lisa Greene-Lewis, a TurboTax tax expert. "Just make sure you have receipts and documentation to back it up."

If you claim the home-office deduction, it has to be a space used "exclusively and regularly for your trade or business" -- not the dining-room table. 

If you claim transportation expenses, you'll need documentation of the mileage used for work: If you deduct 100% of your personal vehicle as a business expense, it's going to raise a flag. 

The largest percentage of Americans who are audited make over $1 million.

Sarah Tew/CNET

Being diligent is especially true when deducting business meals, Greene-Lewis added. 

In the past, they were only 50% deductible -- now you can now claim 100% of the cost of a business meal, "but you have to document who you are with, what the purpose of the meeting was, the date of the meal, and so on," Greene-Lewis said. 

"And of course, keep your receipts," she added.

Read more: Best Tax Software for Freelancers, Gig Workers and Self-Employed

4. You make a lot of money, or no money at all

Higher-income taxpayers are more likely to be reviewed, said Willetts, "but we're talking less than 1% of the total population."

According to the IRS, 2.53% of those earning between $1 million and $10 million were audited in 2015, and 8.1% of Americans who made $10 million or more were.

That compares to less than 1% for all the income brackets under $1 million that year.

The one exception was those declaring "no positive income," 4.47% of whom were audited. A negative income could be the result of capital losses or declared business expenses, which the IRS will want to scrutinize.

You're in the safest position if your total household income is between $25,000 and $200,000, according to the agency. Those taxpayers were audited the least. 

5. You claim too many business expenses or losses

You are required to file a Schedule C form if you have business income, but it complicates your return and can make you more likely to be contacted by the IRS.

Greene-Lewis encourages taxpayers to claim every deduction they're legitimately entitled to. But, she adds, you have to be extremely diligent in justifying those deductions, providing details and supporting paperwork.

The IRS' computer system is looking for deductions that are outside the norm for people in your profession.

Angela Lang/CNET

By and large, the IRS algorithm is looking for deductions that are outside the norm for people in your profession: If you're a patent attorney but your travel expenses are three times what other patent attorneys claim, it could lead to closer inspection.

And If you've taken a loss on your business for several years in a row, the IRS might want to make sure your business is above board.

According to Thomas Scott, a tax partner at Aprio, small business owners who keep sloppy records often make "frivolous business deductions."

"When the business owner makes up expenses and deductions, they tend to stick out," Scott told CNET. "Under an audit, the IRS will require support and proof of deductions and if not provided these deductions will be disallowed."

On a similar note, Scott added, "businesses that try to take incentives and credits that they don't qualify for may cause a red flag."

6. Your charitable deductions are outsized

If you itemize your deductions, you can claim cash donations to recognized charities -- as well as the value of a donated car, clothes or other property. But the IRS notices if these donations "seem out of whack with your income," says Greene-Lewis. The agency's computer system, called Discriminant Information Function, continuously scans tax returns for anomalies.

"If you say your salary was $50,000 last year, but you claimed a charitable deduction that's, like, half your income, it's going to catch their eye," Greene-Lewis told CNET.

For the 2021 tax year, the IRS actually suspended the typical limits on charitable contributions: Individuals are allowed to deduct charitable contributions worth up to 100% of their adjusted gross income.

But doing so is likely to draw scrutiny, so you better have all your paperwork in order.

7. You have undeclared income

This is the big one: Employers are required to file a W-2 with the IRS that reflects your earnings, or 1099s in the case of freelancers and contractors who earn more than $600.

The agency's computer automatically checks to see that your reported income matches up to what your boss submitted. 

It also gets notified of interest or earnings from savings accounts, investments and stock trades, too -- as well as large gambling wins, inheritances and almost any other kind of income. If you fail to report capital gains on cryptocurrency trades, it could trigger an audit.

Even if you work in a cash business -- say, as a waiter or babysitter -- unclaimed income can catch up to you.

"If someone is bringing their child to you to care for, they're probably claiming your service on their taxes. So you need to make sure it all aligns," says Willetts. "Even a small business like a house painter will require you to be bonded. That will eventually cross the IRS's desk." 

For instance, if you declare $20,000 in income on your tax return, but when you apply for a home loan backed by the Federal Housing Administration, you put down $80,000. "These departments talk to each other and eventually it's going to get you caught," Willetts added.

According to Aprio's Thomas Scott, small-business owners who don't keep good records also tend to underreport -- a major audit risk.

"Because the business owner hasn't kept up with their income for the entire year, when it's time to file their taxes they tend to estimate," Scott says. "The problem with this approach shows up because most of the income earned has been reported to the IRS on a Form 1099. The IRS can match the income reported on the owner's return to the income reported on Form 1099s."

The IRS also accepts tips from concerned citizens: Your disgruntled co-worker or aggrieved in-law may be only too happy to report you for tax fraud, especially since the agency's 2006 Whistleblower Program increased incentives to potentially between 15% and 30% of the proceeds the IRS collects.

The three kinds of 'audits'

Typically, the IRS sends three different kinds of notifications: Adjustment letters, correspondent audits and examination audits.

Adjustment letters simply let taxpayers know they owe additional money or that there is a change in their refund amount, typically because of a miscalculation. 

"People get a letter from the IRS and they automatically freak out and think it's an audit, but it's really just an adjustment letter," said Greene-Lewis.

A correspondence audit is a bit more involved: It lets the taxpayer know additional documentation is needed to complete their return. The IRS might ask for receipts, bills, employment documents, canceled checks, legal papers, loan agreements, shareholder reports or even ticket stubs.

An examination audit is what people are really scared of, but less than 1% of Americans are audited in a given tax year, said Willetts. "Generally the IRS says 'If you have the documents, send them to us.'" 

If you do receive a letter indicating the IRS is conducting an examination audit, you might want to solicit a professional, she added.

The process may be conducted through the mail, or more rarely, in person. (In March 2020, the IRS suspended face-to-face examinations because of the COVID-19 pandemic.)

When the audit is completed, your IRS auditor will determine what's required to rectify the situation. If you disagree, there is an appeals process.

Some of the things that get flagged by the agency are no big deal, Willetts said, "and the IRS is not always right -- or not fully right." In 2018, 30,000 of the million or so audits conducted resulted in taxpayers getting additional money back. 

"It's always a pleasure to resolve an issue with the IRS when it's the taxpayer's favor," said Willetts.

How far back can the IRS go to audit a return?

Generally, the IRS will include returns filed within the last three years in an audit, with most audits of returns from the last two.

"If we identify a substantial error, we may add additional years," according to the agency's website, which adds it doesn't usually don't go back more than the last six years.

If an audit is not resolved, the IRS may request extending the statute of limitations for assessing additional taxes and fees, which is usually three years after a return was due or was filed, whichever is later.

The auditee doesn't have to agree to the extension of the statute of limitations date, according to the IRS. "However if you don't agree, the auditor will be forced to make a determination based upon the information provided."

How long should you hold onto your old tax records? 

Since the IRS typically looks at returns from the past three years, it's a good rule of thumb to hold onto your records for at least that long.

Six or seven years is fine if you really want to cover your bases. The agency itself says it won't go back further than that.

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Best Crypto Exchanges for August 2022: Buy and Sell Bitcoin, Ether and More

Best Crypto Exchanges for August 2022: Buy and Sell Bitcoin, Ether and More

Despite price crashes in the first half of 2022, buying and selling cryptocurrency continues to steam forward as the "crypto winter" shows signs of thawing. While governments have increased their efforts to regulate crypto markets, scans continue to plague crypto investors, and it's more important than ever to find a trusted platform for buying and selling crypto. 

Crypto exchanges are where most crypto traders buy and sell bitcoin, ether, dogecoin and other types of cryptocurrency. In its rawest and most decentralized form, cryptocurrency is relatively unfriendly to obtain and use. Crypto exchanges make it fairly simple to trade all sorts of crypto tokens and coins.

The best crypto exchanges will hold your crypto securely, provide you with unfettered control over your assets and make buying, selling, sending, receiving and trading crypto simple and affordable.

Some investors may desire more advanced features from crypto exchanges, including the ability to earn interest, access more esoteric forms of crypto or buy, store and display NFTs. (It's worth noting that the safest place to hold your crypto is in a cold storage wallet that you control exclusively.)

Here, we'll focus on the basics, highlighting the exchanges that make it easy to sign up, get started and carry out transactions without getting fleeced on fees. As with any investment, high fees can erode returns over time, and some exchanges offer more competitive fees than others.

Whether you're a beginner looking for an easy on-ramp to crypto, or you're a high-volume trader looking for the lowest "maker" and "taker" fees, we've got the info you need to choose the best crypto exchange for you.

Note: Crypto exchanges add and delist crypto tokens on a regular basis. Our "number of supported tokens" data is based on data from each exchange's website as of July 25, 2022.

Best crypto exchanges

James Martin/CNET

• US availability: All states except Hawaii
• Number of supported tokens: 207
• Spot trading fees: $0.99 to $2.99, or 1.49% for trades over $200
• Credit/debit card fee: 3.99%

Straightforward and simple, Coinbase provides an intuitive and streamlined experience that makes it easy to buy, sell, trade and send bitcoin, ether and a variety of other cryptocurrencies. As a public company, it's among the most established, well-capitalized and popular players -- but you'll pay for the privilege, with trading fees that are higher and somewhat more complicated than other exchanges. We think the platform's ease of use and simplicity are worth the higher fees, only if you plan to make infrequent and relatively modest transactions.

Coinbase says it keeps 98% of its crypto assets in cold storage -- a method for holding crypto tokens offline -- and says that it has never lost any user funds. Balances of US dollars held in Coinbase accounts are insured by the FDIC, and Coinbase maintains a private insurance policy worth $320 million overall for crypto assets it holds. Coinbase's first-quarter earnings report raised eyebrows with a new disclaimer stating that custodially held crypto could be used to pay creditors in the case of the company going bankrupt.

Unlike most crypto exchanges, Coinbase offers live phone support in addition to email support -- which may bring new crypto investors an additional modicum of comfort – and there's a well-written and helpful library of content for novices. Coinbase is available to residents of all US states except Hawaii.

For real-time crypto transactions (referred to as "spot trades"), Coinbase charges between $0.99 and $2.99 for trades up to $200; for transactions above $200, it's a flat 1.49% fee. Coinbase also adds a 0.5% "spread" fee on top of that. 

And purchasing crypto with a debit card adds a significant 3.99% fee. Funding your Coinbase account with an electronic ACH transfer is free, however. A wire transfer deposit costs $10.

The platform's advancedPro version, which runs on a separate app and website, charges lower fees but features a less user-friendly interface that's not suited for beginners.

Sarah Tew/CNET

• US availability: All states except Hawaii, New York or Washington
• Number of supported tokens: 191
• Trading fees: 0.0 to 0.2% maker; 0.0 to 0.5% taker; 1.5% instant buy
• Credit/debit card fee: No credit/debit card purchases in US

One of the oldest cryptocurrency exchanges, and in business since 2013, Kraken's low fees make it particularly attractive to high-volume traders. Kraken also offers riskier and more advanced trading features -- such as margin trading and on-chain staking, with biweekly payouts.

The exchange supports transactions for about 130 crypto assets for purchase or trade in the US. It also supports more than 100 crypto pairs -- two crypto tokens that can be exchanged for each other.

Kraken does not include any insurance on crypto deposits held in hot wallets, but it does claim to keep 95% of digital assets offline with enough liquidity to allow users to withdraw at any time. No hacks of the Kraken crypto exchange have ever been reported.

While Kraken is available to most US crypto investors, it's not licensed for crypto services in New York, Washington state or Hawaii.

Sarah Tew/CNET

• US availability: All 50 states
• Number of supported tokens: 101
• Trading fees: Spot trading fees: $0.99 to $2.99, or 1.49% for trades over $200
• Credit/debit card fee: 3.49%

Gemini features competitive trading fees and support for almost 100 currencies and 20 crypto pairs, but the exchange's educational resources are what may be most appealing to novices. It's also one of the few exchanges operating in all 50 US states -- and the only exchange on this list that does.

This crypto exchange offers strong security features, including FDIC insurance for US dollar deposits, private insurance for hot wallets -- on the blockchain -- crypto assets and support for U2F hardware keys. Its ActiveTrader platform for high-volume traders offers charting, multiple order types, auctions and block trading. Having acquired the NFT marketplace Nifty Gateway in 2019, Gemini also lets users buy and sell crypto collectibles and digital art. 

Gemini's educational resources are the best we found on any crypto exchange. Its Cryptopedia section provides deep knowledge about cryptocurrencies and the technology behind them. Cryptopedia contains a bounty of articles on a wide range of crypto subjects, from basic explainers on bitcoin and blockchain to more advanced topics like real-world uses for smart contracts, the NFT marketplace model for music and decentralized cloud storage.

James Martin/CNET

• US availability: All states except New York
• Number of supported tokens: 333
• Trading fees: 0.04% to 0.4% maker; 0.1% to 0.4% taker
• Credit/debit card fee: 2.99%

Featuring transactional support for more than 300 cryptocurrencies, Crypto.com offers the widest range of cryptocurrencies of any exchange on this list. It also lists support for more than 80 trading pairs.

Crypto.com claims that 100% of all user cryptocurrencies are held offline in cold storage and that it has secured $750 million in crypto insurance. The exchange also says that all online funds in its custodial wallets are generated by the company itself to fund user withdrawals, meaning customer crypto assets are safe offline. US dollar balances in Crypto.com accounts are held by the Metropolitan Commercial Bank and insured by the FDIC.

Crypto.com uses multifactor authentication -- including password, biometric, email, phone and authenticator verification -- for all crypto transactions. Crypto.com also requires whitelisting of all external addresses via email verification. That means you'll need to explicitly authorize any crypto wallets or bank accounts for withdrawal, which helps protect your crypto assets from accidental or manipulated withdrawals.

Along with Gemini and bitFlyer, Crypto.com is one of only 15 exchanges allowed to operate in Hawaii. Residents of every US state except for New York can use Crypto.com.

Sarah Tew/CNET

• US availability: All states except West Virginia and Nevada
• Number of supported tokens: 15
• Trading fees: 0.03% to 0.1% maker/taker fee
• Credit/debit card fee: 1.95%

BitFlyer is a private company that launched its crypto exchange first in Japan in 2014 and later expanded into the US in 2017. Though bitFlyer has much lower trading volume than the big exchanges, it ranks in the top 20 for average liquidity, per CoinMarketCap, and it supports 11 different cryptocurrencies, including bitcoin, ether, litecoin and Stellar Lumens (XLM).

BitFlyer offers the lowest trading fees of any exchange on this list. There are two ways to buy and sell crypto on bitFlyer -- through the instant buy/sell platform and transactions on bitFlyer's Lightning Network.

Once you've verified your identity and funded your account, maker and taker fees on the bitFlyer Lightning Network max out at 0.1% for transactions less than $50,000. That's even lower than Kraken's baseline 0.2% fee for makers and 0.5% for takers -- and far more affordable than Coinbase Pro's 0.4% for makers and 0.6% for takers.

BitFlyer's instant buy and sell platform doesn't charge any transaction fees at all, which makes it a tempting proposition, but watch out for the wild range of spread fees, from 0.1% to 6%. BitFlyer will show you the spread fee for any transaction before you make it. Its 1.95% fee for credit card and debit card purchases is also the lowest on this list.

Its interface is more primitive than other exchanges, and we encountered a few minor hiccups -- unexplained error messages and missing 2FA codes -- during the sign-up process. It's worth noting that the lower volume of transactions on the bitFlyer exchange may impact your ability to complete trades at the prices you want.

BitFlyer is available to all US residents except for those living in the states of West Virginia and Nevada.

Best crypto exchanges, compared

	Coinbase	Kraken	Gemini	Crypto.com	bitFlyer
Best for	Beginners	Advanced trading	Educational resources	Altcoins	Low fees
Currencies	207	191	101	333	15
Fees	$0.99-2.99, or 1.49% for trades over $200	0.0-0.2% maker; 0.0-0.5% taker; 1.5% instant buy	$0.99-2.99, or 1.49% for trades over $200	0.04-0.4% maker; 0.1-0.4% taker	0.03%-0.1% maker/taker
Excluded states	Hawaii	Hawaii, New York, Washington	None	New York	Nevada, West Virginia
Year founded	2012	2013	2014	2016	2014

What about Binance and Binance.US?

Binance is the largest cryptocurrency exchange in the world, per CoinMarketCap. The exchange launched in China in 2017 and moved its servers and operations to Japan a few months later, in advance of the Chinese ban on cryptocurrency. 

In 2019, due to increased enforcement of regulations, Binance was banned in the US. The existing crypto exchange eventually spun off Binance.US as a separate company that now operates in 45 states. Binance and Binance.US are sister companies with distinct ownership structures.

Binance.US features a very similar interface and experience to Binance and also boasts some of the lowest fees of the major crypto exchanges. However, the company has a rocky past and uncertain future. 

In May 2021, Bloomberg reported that the Justice Department and IRS were investigating Binance's operation for possible links to money laundering and tax evasion. Bloomberg followed up in September with news that the Commodity Futures Trading Commission was probing Binance's connections to insider trading and market manipulation.

In April, Reuters reported evidence that Binance had turned over data to the Russian Federal Security Service, or FSB, about crypto donations to Alexei Navalny, a political opponent of Russian President Vladimir Putin.

Most recently, Binance has come under investigation by the Securities and Exchange Commission for possibly violating US law when it began selling its native token BNB in 2017 to fund its global exchange, per Bloomberg. And a special report from Reuters indicates that, between 2017 and 2021, Binance processed $2.35 billion in crypto that originated from "hacks, investment frauds and illegal drug sales."

Binance itself was hacked in 2019, with thieves getting away with 7,000 bitcoin worth about $40 million, though the exchange refunded users who lost money using its Secure Asset Fund for Users. Several investors who were locked out of trading in 2021 and suffered major losses are planning a class-action lawsuit against Binance.

Although Binance.US provides a quality experience on mobile and desktop and features low trading fees, we would not recommend using the crypto exchange until the legal investigations have been completed and Binance.US provides more transparency on its practices to regulators and users.

FAQs

What is a crypto exchange?

A crypto exchange is a platform that allows users to buy and sell digital assets and cryptocurrencies such as bitcoin and ether. Some may also support the buying, selling and trading of NFTs.

Crypto exchanges generally let users deposit and withdraw funds in either fiat (such as US dollars) or cryptocurrencies, buy crypto with US dollars or another currency, trade one crypto for another, send crypto to another individual (or business) and sell crypto for US dollars.

What's the difference between a crypto exchange and a crypto brokerage?

A crypto exchange provides a platform for individual buyers and sellers to trade crypto -- or exchange tokens and fiat currency, like US dollars. Exchange rates are ostensibly based on market prices.

Similarly, a crypto brokerage serves as an intermediary for buyers and sellers, but the broker sets the prices. Brokerages often support fewer cryptocurrencies yet charge lower fees than exchanges. Robinhood, for example, supports only seven cryptocurrencies -- bitcoin, ethereum, dogecoin, litecoin, ethereum classic, bitcoin cash and bitcoin SV -- but charges no transaction fees.

How much does it cost to trade cryptocurrency?

As with any investment, it's important to consider the cost of buying, selling and trading cryptocurrency -- high fees can erode returns over time. Exchange fees are typically based on how you buy, sell or trade. 

"Spot" trades, also known as "instant" transactions, involve buying from or selling to an exchange in real-time for a set price. These trades are simple to make, and most exchanges charge a relatively high fee to make them, often approximately 1.5% of the transaction value.

A more sophisticated type of trade -- using "buy" and "sell" orders -- is more convoluted and less user-friendly, especially for beginners. But these trades are also considerably less expensive, with "maker" and "taker" fees costing between 0.1% to 0.5% of the transaction value. With this approach, you choose the price you wish to buy or sell at, and a transaction clears only when the market finds a buyer or seller willing to buy or sell at that target price. 

Where else can I purchase Bitcoin and other cryptocurrencies?

Along with crypto exchanges and brokerages like Robinhood, some payment services allow users to buy and sell cryptocurrency, although your options for tokens will be more limited, and you usually won't be able to move crypto out of your account and into a private wallet.

Cash App, Venmo and PayPal all let users buy bitcoin via their payment apps. Cash App only buys and sells bitcoin, but it's the only payment service that lets users withdraw crypto to their own private wallets. Crypto fees aren't advertised on Cash App and will vary from trade to trade. Generally, Cash App will charge lower fees than most crypto exchanges for smaller trades, yet higher percentage fees for larger trades.

Venmo and PayPal support bitcoin, bitcoin cash, ethereum and litecoin. Both use a tiered fee structure for crypto that's similar to Coinbase's -- $0.49 to $2.49 on transactions up to $200, a 1.8% fee on transactions between $200 and $1,000 and a 1.5% fee on transactions more than $1,000. Both sites also charge unspecified spread fees that are estimated at 0.5%. You can send crypto to other Venmo or PayPal users with each service, but you can't move your crypto into your own wallet. 

Why are so many crypto exchanges unavailable in the US?

Regulations on cryptocurrency in the US are more stringent than other countries, and also vary from state to state. 

The SEC and crypto exchanges have clashed several times in recent years, with some exchanges facing investigations by the financial agency. The main sticking point is the SEC's classification of virtual currencies. In 2017, the SEC announced that many crypto tokens represented investment securities, which must be registered with the SEC. The agency also argued that crypto exchanges should register with the SEC as securities trading platforms.

The additional regulatory burdens and threat of lawsuits from the SEC have prompted several crypto exchanges to pull out of US markets.

Methodology

CNET reviews crypto exchanges and brokerages by comparing them using an established set of criteria, including maker, taker, transaction and withdrawal fees, security features, number and type of supported crypto assets, geographical availability, number and type of supported crypto pairs, software interface and functionality, trade limits or restrictions, educational resources and customer support.

More crypto advice

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

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