There are several online exchanges that allow individuals in the United Kingdom to buy and sell Ethereum. The exchanges listed on this page are all available to UK residents and the guide below will explain more about the regulatory status of Ethereum with the FCA as well as important principles surrounding the security of an investment. Ethereum and other cryptocurrencies are very volatile, please consider the risks before investing. Further details on why Ethereum is an appealing investment and the risks involved can be found here.
eToro is authorized and regulated by the Financial Conduct Authority (FCA)
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Coinbase is recognized as one of the most popular exchanges for users to buy and sell Ethereum. The exchange is open to many countries in Europe as well as the United Kingdom and USA. Residents in Australia are able to purchase Ether at Coinbase, but another exchange must be used to sell the cryptoasset for AUD.
localethereum is an anonymous marketplace for buyers and sellers of Ether powered by smart contracts. Launched on October 20th 2017, localethereum is a new but popular place to purchase Ether from anywhere in the world.
Binance is a cryptocurrency exchange with a daily trading volume that regularly exceeds 2.5 billion US dollars with a membership in excess of 10 million users
Changelly is a rapidly growing exchange which allows users to buy dozens of cryptocurrencies using a credit/debit card or other cryptocurrencies.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CoinFalcon supports dozens of altcoins as well as Ethereum, Bitcoin and Ripple. Note that bank deposits are not accepted; cryptocurrencies only.
The above exchanges can all be used to purchase Ethereum. Registration is free and fast, particularly for users wishing to purchase relatively small amounts of Ether (less than £1,000). Larger purchases will require proof of address and ID checks to comply with AML (anti-money laundering) and KYC (know your customer) regulation. The process to buy Ethereum is very simple: register an account, deposit Pound Sterling and place a trade to buy Ethereum (ETH). Platforms such as Coinbase and eToro make this process extremely simple while others require a little more trading knowledge, details of which are linked to below.
The exchange listed above have varying banking methods, and each method has been denoted by icons which represent a deposit option.
This is the most popular choice of payment for UK investors and purchases can often be completed within minutes. Larger purchases are likely to require AML and KYC checks, particularly at Coinbase and eToro and may take a number of days to clear.
Bank transfers require several days to be processed and with many exchanges being based outside of the UK, these transfers can often incur fees. In March 2018, Coinbase moved to partner with Barclays which will dramatically reduce fees for UK investors. The company will also accept deposits and withdrawals via the popular FasterPayments (FPS) service. FPS can be used to transfer as much as £250,000.
PayPal offers a convenient way to buy Ethereum in the UK. Platforms listed as accepting PayPal are also likely to offer other electronic payment platforms such as Skrill and ePayments.
Very few Ethereum exchanges will allow investors to buy Ethereum with cash as it throws up a range of compliance issues. Localethereum is currently the only marketplace allowing GBP cash purchases which are completed “peer-to-peer” – often in person.
New investors need not worry about purchasing Ethereum with other cryptocurrencies such as Bitcoin. However, those who wish to buy Ethereum with another cryptocurrency can do so at these exchanges. Trading crypto can be a complex matter, more detail can be found in the article below.
An Ethereum market is similar to foreign exchange, prices are quoted as ETH/GBP, ETH/USD, ETH/EUR and so on. Prices are also often quoted as ETH/BTC – the price of Ethereum measured in Bitcoin. As a resident of the United Kingdom, the ETH/GBP market will be most suitable as this will not require any conversion fees. Unfortunately, the current liquidity (£GBP volume of trades) in the ETH/GBP market is almost non-existent, meaning that the only viable option for UK purchasers is to route through another market such as ETH/USD or ETH/EUR.
This problem does not add any additional complexity to the buying of Ethereum, however it does come with a conversion fee. Fees differ from platform to platform, however the total cost to convert between currencies can be as high as 3% at some exchanges. This problem will disappear over time as new markets become available from UK-based exchanges. Coinbase has partnered with Barclays to offer cheaper services to their UK customers, something which no other exchange has yet managed to achieve and is welcome news to all investors in the United Kingdom.
The exchanges listed above will be updated as more become available to UK users.
The UK has one of the most well established and progressive financial regulators in the world. While the FCA has issued a fair warning about the risks of cryptocurrencies to UK consumers, they have also demonstrated an interest in facilitating the market – something which could help London further establish itself as the “Financial Capital of the World”.
There is no ban on Ethereum or other cryptocurrencies in the UK, however most exchanges remain unregulated. This lack of regulation means that there is no guarantee of security, however as noted in the section below on Ethereum security, this risk factor can be mitigated to a large extent.
Those new to Ethereum and cryptocurrencies more broadly will be very conscious of security. There are two major security risk factors that any Ethereum investor exposes themselves to when buying ETH:
There have – and will continue to be – numerous multi-million pound hacks on cryptocurrency exchanges. While the fundamental construction of Ethereum is inherently secure, exchanges dealing with the cryptocurrency at scale have often run into problems. When an exchange is hacked, it is because they did not adopt proper security practices, not because the Ethereum blockchain had a vulnerability. When storing Ethereum on a UK exchange, the investor does not have ownership of those coins. As such, responsibility is placed in the hands of the exchange and without FCA regulation there is often no recourse for recovery if funds are lost.
Given that storing Ethereum on an exchange carries risk, the alternative is to store the coins with the individual (user). If done properly, securing Ethereum as an individual brings unprecedented levels of security. However, if approached without the proper understanding, storing coins as a user can result in misplacement of funds or loss of a “private key” which can render the investment lost forever. Investors in the UK can store coins safely on a “hardware device” such as a Trezor or Ledger Nano S, however some basic education is necessary. The guide below will help users familiarise themselves with wallet security.
An alternative to the above is to use a Vault provided by Coinbase. While this still requires placing some level of trust in a 3rd party, some additional steps such as multi-party verification, delayed withdrawals and email alerts provide a greater level of security. UK customers can open a Coinbase Vault for free.