Search the terms of service for these words before you deposit

Quick answer: Open the exchange's terms and use the search function. Look for who holds title to your coins, whether they can lend them out, when they can freeze you, how you're allowed to sue, and what a withdrawal costs. Then send a small test deposit and pull it back out before you fund the account properly.

Don't read it. Search it.

The average terms of service runs long enough to cure insomnia, and the exchanges know you'll click "agree" anyway. That's the whole business model of the fine print.

So don't read it top to bottom. Open the document, hit Ctrl+F (Command+F on a Mac), and look up about a dozen words. Each one leads to a clause that decides what happens to your money on the worst day.

Save a copy first. Print it to PDF and put the date in the file name. Terms change, and you'll want proof of what you agreed to. If that sounds like extra work, it's the same habit as the one in the biggest threat to your crypto is your own filing system. Paper beats memory.

Whose coins are they?

Search these: title, ownership, custody, commingle, lend, rehypothecate, "use your assets."

You want a sentence that says, in plain words, that the assets in your account belong to you and aren't the company's property. Then you want to know whether they can be pooled with other customers' coins, and whether the exchange can lend or reuse them.

This matters most with anything called "Earn," "yield," or "rewards." Those programs usually work because the company is doing something with your coins. In early 2023, a bankruptcy judge ruled in the Celsius case that coins in its Earn program belonged to the company's estate, largely because of the terms customers had accepted. Those customers went to the back of the line with everybody else the company owed money.

Plain storage and a yield program are different products with different risks. The terms will tell you which one you've signed up for. The marketing page won't.

What's insured and what isn't

Search: FDIC, SIPC, insured, insurance.

Crypto isn't covered by FDIC insurance, and it isn't covered by SIPC, the protection that applies to brokerage accounts. Many exchanges say exactly that in their terms, in a paragraph they hope you skim. Some mention FDIC coverage on the dollars in your account, but that usually comes with conditions about how the cash is held at partner banks.

If the exchange says it carries insurance, read what the policy covers. Theft from the company's own storage is a different event from the company going broke, and a policy for one doesn't cover the other.

How they can lock you out

Search: suspend, restrict, terminate, freeze, hold, sole discretion.

Almost every exchange reserves the right to freeze an account for a compliance review, and that's not sinister by itself. They're required to watch for fraud and money laundering. The annoying part is how much room the clause gives them.

Look for three things:

• Whether they have to tell you why, and how soon.
• Whether you can still withdraw if the account is closed.
• Whether a freeze can last indefinitely.

Picture a price that doubles while your account sits under "review" for six weeks. Your coins are in there, you can see them, and you can't move them. That scene has played out for real customers. A good clause says you can withdraw after termination, barring a legal order. A bad one says nothing, which means nothing is promised.

Where you're allowed to complain

Search: arbitration, class action, waive, jury, governing law.

Most exchange terms force disputes into private arbitration and take away your right to join a class action. That's a real trade. Arbitration can be quicker and cheaper than a lawsuit, but it's private, the options for appeal are narrow, and the exchange picks the rules. Check where the arbitration happens and who pays the fees.

Some terms give you a short window to opt out of arbitration, usually by emailing a specific address. The clock typically starts the day you open the account. If you care about preserving your right to sue, opt out in the first week.

Governing law tells you whose courts apply. A company incorporated in a place you've never heard of is a company you'll struggle to hold accountable.

Who actually runs the thing

Find the legal entity name in the terms, then look it up.

For a US-facing exchange, check the FinCEN registry of money services businesses and your own state's licensing records. The Nationwide Multistate Licensing System has a public consumer lookup. A company can look slick, sponsor a stadium, and still be registered nowhere that matters to you.

If the entity is offshore, that doesn't automatically mean it's bad. It does mean your recourse shrinks, and you should size your deposit accordingly. If you want to see how fake legitimacy gets built, read the crypto scams that catch careful people too.

The terms can change on you

Search: modify, amend, update, continued use.

Nearly all of them let the company rewrite the terms by posting a notice. If you keep using the account, you've agreed. That's why the dated PDF matters. When something changes, you can see what moved, and a changed arbitration or custody clause is a reason to reconsider whether you want your money there.

What it costs to leave

Search: fee schedule, spread, network fee, withdrawal, dormant, inactive, minimum.

"Zero commission" often means the exchange earns on the spread, the gap between the price it shows you and the market price. That's allowed, but it's still a cost. Add withdrawal fees, which can be a flat amount no matter how small your transfer. Add dormancy or inactivity fees, which exist on some platforms and are easy to miss.

Then look for withdrawal limits and delays. A daily cap of a few thousand dollars sounds fine until you need out of a large balance in a hurry.

The test that beats every clause

Reading the terms tells you what's promised. A test tells you what's real.

Deposit a small amount, fifty dollars or whatever you'd shrug off losing. Buy a little. Then withdraw it to a wallet you control and time how long it takes. If it's smooth, deposit more in stages. If you hit a snag, a hold, or a support reply that reads like a form letter, you've learned it cheaply.

If you're just getting oriented on the asset itself, start with Bitcoin, explained for somebody who skipped the last decade before you pick a platform.

For large sums, pay a securities or consumer attorney for an hour to read the clauses that worry you. A few hundred dollars is cheap next to a frozen account.

Nobody is coming to rescue you from a bad clause you agreed to. Read the six words, run the test, and keep what matters in your own hands.