What you will need
- A government-issued ID and a proof of address for regulated platforms. Many countries now apply AML rules and the Travel Rule to virtual asset service providers.
- A secure email address and strong authentication on all accounts. Security keys or phishing-resistant MFA are preferred.
Step 1: Check legality and taxes where you live
Confirm that buying and holding crypto is permitted and whether your purchase or later sale will be taxable. In some jurisdictions, brokers and exchanges must report certain digital-asset sales, and tax agencies expect you to keep detailed records of cost basis and transactions.
Practical tips:
- Search your national tax authority’s “digital assets” page and note what records they require you to keep. Many explicitly ask for dates, amounts, fiat values, and wallet addresses.
Step 2: Decide how you want to own crypto
There are two common paths:
- Buy and hold coins directly on a regulated exchange or broker, then optionally withdraw to your own wallet. This involves learning basic wallet hygiene but gives you direct ownership.
- Buy exchange-traded products that hold crypto if available in your market, which give price exposure inside your brokerage account. For example, in the United States, spot Bitcoin ETPs were approved in January 2024 and spot Ether ETPs in 2024, with subsequent approvals in 2024 for additional products.
Step 3: Set up your wallet
If you plan to self-custody, create a non-custodial wallet before buying so you can withdraw safely. Write down your recovery phrase offline and never share it. Transactions are generally irreversible, so always test with a small amount first.
Getting started options:
- Mobile or desktop software wallet for small amounts and learning.
- Hardware wallet for long-term storage once your balance grows.
Step 4: Choose a reputable on-ramp
Pick a platform that is licensed or registered where it operates and complies with local marketing and consumer-protection rules. For example, in the UK there are rules for crypto promotions such as risk warnings and a cooling-off period for first-time investors; in the EU, MiCA establishes licensing and conduct requirements for crypto-asset service providers, with stablecoin rules already in force and provider licensing phased in from late 2024 with transitional periods.
Checklist for platform selection:
- Clear ownership and jurisdiction, public regulatory status, transparent fees, and robust security disclosures.
- Avoid relying solely on “proof-of-reserves” claims; investor advocates warn these reports are inherently limited and not equivalent to audits.
Step 5: Complete KYC and account security
Most regulated platforms require identity verification to meet AML standards and the Travel Rule. Provide accurate information and enable phishing-resistant MFA or hardware security keys immediately after account creation.
Step 6: Add funds
Link a bank account or card, or use supported payment rails. Bank transfers often have lower fees but take longer to settle. Some platforms also support local instant-payment networks. Verify deposit limits and settlement times.
Step 7: Place your first order
- Market order buys immediately at the best available price.
- Limit order lets you set a maximum price.
Start with a small test purchase to learn the interface, then scale.
Step 8: Withdraw to self-custody (optional but recommended)
When comfortable, withdraw to your wallet. Double-check the network and address, and send a tiny test first. Keep your recovery phrase offline and consider using a hardware wallet for larger amounts. Transfers on public chains cannot be reversed.
Step 9: Track costs and taxes
Keep a running log of date, time, asset, quantity, fees, and fiat value for each buy, sale, swap, and transfer. Some tax authorities highlight the need to maintain basis and transaction records, and several have moved toward broker reporting for certain digital-asset sales.
Fees to expect
- Trading fees: maker/taker or flat spreads.
- Fiat deposit or withdrawal fees.
- Network fees for on-chain withdrawals, which vary with demand.
- Currency conversion if your account is in a different fiat currency.
Safety red flags in 2025
- Anyone asking you to “verify” your wallet or recovery phrase. No legitimate service needs your seed phrase.
- Promotions that minimize risk or pressure you to act immediately. Some jurisdictions mandate risk warnings and cooling-off periods for a reason.
- Heavy marketing that leans on “proof-of-reserves” as safety. Investor advisories explain why these reports can be misleading and limited.
- Giveaways, investment “coaches,” or romance-style approaches. Consumer agencies continue to warn about crypto scams that exploit social engineering. Enable the strongest MFA you can.
Quick 2025 regulatory notes
- Global AML standards apply to virtual assets and service providers, including Travel Rule requirements to transmit sender/recipient information; FATF urged countries in 2024–2025 to accelerate implementation and enforcement.
- In the EU, MiCA is being phased in: stablecoin issuer rules started in mid-2024; crypto-asset service provider licensing and conduct rules follow with application from late 2024 and transitional arrangements into 2025–2026. Check the latest ESMA and EBA updates when choosing EU-based platforms.
- In the UK, the FCA’s financial promotions regime for qualifying cryptoassets has applied since October 2023, with risk warnings, cooling-off for first-time investors, and restrictions on incentives.
Glossary for beginners
- Exchange or broker: a platform where you buy or sell crypto for fiat.
- Custodial vs non-custodial: a platform holds keys for you vs you hold your own keys.
- Seed phrase: human-readable backup of your wallet’s private key. Store offline.
- Network fee: the on-chain fee paid to miners or validators to process a transaction.
- Stablecoin: a token designed to track a fiat currency.
Final note
Nothing here is financial, legal, or tax advice. Regulations and availability vary by country; always verify local rules and choose reputable, compliant providers where you live.
