Crypto Exchanges Prioritize Ease Over Transparency

A recent Consumer Reports survey found that 20% of U.S. adults either own or have owned cryptocurrency, and 49% of those investors use a crypto exchange as their primary platform for buying and selling coins.

The five largest exchanges - Binance.US, Coinbase, Crypto.com, Gemini, and Kraken - were evaluated by Consumer Reports using its Fair Digital Finance Framework. The framework assesses factors such as consumer safety, transparency, and user experience.

All of the exchanges made buying and selling crypto easy, but they often lacked transparency around pricing and risks, burying this information in dense legal disclosures. Additionally, the platforms encouraged users to engage in impulsive trading behavior through incentives and gamification tactics.

The exchanges' onboarding processes did not clearly disclose key risks such as the lack of FDIC protection for coins or provide information regarding custody arrangements for crypto assets held in wallets managed by the exchange.