Key Points

  • Most people buy and sell crypto through a centralised exchange or broker app: you verify your identity, deposit money, place an order and, when you sell, withdraw back to your bank.
  • Check that the platform is properly registered where you live. In the UK, crypto firms must be registered with the Financial Conduct Authority. In the US, exchanges register with FinCEN and need licences in the states they serve.
  • The price you pay includes more than the quoted fee. Spreads, deposit charges and withdrawal fees can matter more than the headline trading fee.
  • Selling has its own steps: converting back to pounds or dollars, withdrawing to your bank and keeping records for tax.
  • In both the UK and the US, selling, swapping or spending crypto can create a tax bill, and US exchanges now report your sales to the IRS. Keep a record of every purchase and sale from the start.

Quick Answer

To buy crypto, you open an account with a registered exchange or broker, verify your identity, deposit money by bank transfer or card, and place an order. To sell, you place a sell order, convert the crypto back to your local currency and withdraw it to your bank. Read each platform's full cost, not just its trading fee, because spreads and withdrawal charges add up. The common misread is that selling ends the process. In the UK, the US and many other countries, a sale is a taxable event, so your records matter as much as the trade.

Where can you buy crypto?

Most people start with a centralised exchange or a broker app. You trade with the platform or with its other users, and the platform holds your funds until you move them out.

  • Exchanges show a live order book and usually charge lower fees, but their screens can be more complex.
  • Broker apps show a simple buy price and sell price. They are easier to use, but the gap between those prices, called the spread, is often where the cost sits.
  • Decentralised exchanges let you swap tokens directly from your own wallet. You usually need crypto already, so they are rarely where beginners start.

If this is your first purchase, our step-by-step guide to moving from fiat to crypto walks through it in detail.

How do you choose a safe platform?

Start with registration and track record, then look at costs.

  • Registration in the UK. Check the Financial Conduct Authority's register for the firm's name before you sign up.
  • Registration in the US. Exchanges register with FinCEN as money services businesses and need money transmitter licences in the states where they operate. Some platforms are not available in every state, and New York requires its own BitLicense, so check that the platform is licensed for where you live.
  • Security. Two-factor authentication, withdrawal address allow-lists and a history without major unresolved losses are good signs.
  • Full costs. Compare the spread, trading fee, deposit fee and withdrawal fee for the amount you actually plan to use.
  • Withdrawals. Make sure you can withdraw both crypto and money back to your bank, and see how long it takes.

Registration with a regulator does not protect you from every loss. Crypto held on a platform is generally not covered by deposit protection the way bank savings are: not by the UK's Financial Services Compensation Scheme, and not by FDIC or SIPC insurance in the US. Our guide to exchange hacks and counterparty risk explains what can go wrong.

How do you buy crypto, step by step?

  1. Create an account and turn on two-factor authentication straight away, ideally with an authenticator app rather than text messages.
  2. Verify your identity. Registered platforms must check who you are, usually with photo ID and a selfie. Our guide to KYC and AML checks explains why.
  3. Deposit money. Bank transfer is usually cheapest. Card payments are faster but often cost more. Our comparison of UK on-ramps covers the options.
  4. Place an order. A market order buys straight away at the best available price. A limit order sets the most you are willing to pay and waits until the price reaches it.
  5. Decide where to keep it. You can leave the crypto on the platform or move it to a wallet you control. Our guide to self-custody covers the trade-offs.

In the UK, platforms must show first-time investors risk warnings and a cooling-off period before they can invest, and may ask questions to check you understand the risks. That is a legal requirement, not a fault. US platforms show their own risk disclosures and may limit some products by state.

How do you sell crypto and get money back to your bank?

  1. Move the crypto to the platform if it is in your own wallet. Check the network carefully before sending, because sending on the wrong network can lose the funds.
  2. Place a sell order for your local currency, using a market or limit order as when buying.
  3. Withdraw to your bank. Use a bank account in your own name. Large or first-time withdrawals may trigger extra checks.
  4. Record the sale. Note the date, amount, price received and fees.

Some banks limit or block payments to and from crypto platforms. If a deposit or withdrawal is refused, check your bank's policy before trying again.

Do you pay tax when you sell crypto?

Usually yes if you make a gain, in both the UK and the US. In each country, buying with your local currency and holding is not taxable on its own. Selling, swapping one coin for another and spending crypto are.

In the UK

HM Revenue and Customs treats selling, swapping and spending crypto as disposals that can be subject to Capital Gains Tax. You only pay on total gains above the annual exempt amount, which is £3,000 from the 2024 to 2025 tax year.

In the US

The IRS treats crypto as property, so a sale, swap or purchase made with crypto is a taxable disposal. Gains on crypto held for more than a year are taxed at long-term capital gains rates; gains on crypto held for a year or less are taxed as ordinary income. The main tax return asks directly whether you received or disposed of digital assets during the year.

US exchanges and other brokers now send you and the IRS Form 1099-DA. For sales from 1 January 2025, the form shows your gross proceeds. For crypto bought from 1 January 2026 and kept at the same broker, it also shows your cost basis. Crypto moved in from your own wallet, or bought before 2026, may arrive with no cost basis on the form, so your own records are what prevent you being taxed on the full sale amount.

In either country, keep records from your first purchase: dates, amounts, prices and fees for every trade, transfer and swap. Check your tax authority's guidance or speak to a tax adviser, because rules change and other countries treat crypto differently.

Source: HMRC, Cryptoassets Manual and Capital Gains Tax guidance; IRS, Instructions for Form 1099-DA and digital asset guidance; Financial Conduct Authority, Financial Services Register.

What are the common mistakes to avoid?

  • Using unregistered platforms found through adverts or social media messages, or platforms not licensed where you live.
  • Ignoring the spread on simple buy buttons, which can cost more than the stated fee.
  • Sending on the wrong network when moving crypto between a wallet and a platform.
  • Trusting strangers who offer to help you buy, recover funds or trade for you. These are common scams. Our guide to spotting crypto scams lists the warning signs.
  • Not keeping records until tax time, when rebuilding a year of trades is slow and error-prone.

Frequently Asked Questions

What is the cheapest way to buy crypto?

Usually a bank transfer into an exchange, then a limit order on the exchange's main trading screen. Simple buy buttons and card payments are convenient but tend to cost more.

Can I buy a fraction of a bitcoin?

Yes. Bitcoin divides into 100,000,000 units called satoshis, and most platforms let you buy small amounts in pounds or dollars.

How long does it take to sell crypto and get my money?

Selling on a platform is usually immediate. Withdrawals to a bank can take from minutes to a few working days, depending on the platform and payment method.

Is it safe to keep crypto on an exchange?

It is convenient, but you are relying on the exchange. Many people keep only what they trade on an exchange and hold the rest in a wallet they control.

Every call, scored

We publish each market call with its date and the condition that would prove it wrong, then score it when it resolves, misses included. Anyone can check.

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Further Reading

Sources

  • Financial Conduct Authority, Financial Services Register and cryptoasset rules: fca.org.uk
  • HM Revenue and Customs, Cryptoassets Manual and Capital Gains Tax: gov.uk
  • Internal Revenue Service, digital assets guidance and Instructions for Form 1099-DA: irs.gov
  • Financial Crimes Enforcement Network, money services business registration: fincen.gov

This article is for education only and is not financial, investment, tax or legal advice. Crypto assets are volatile and you can lose some or all of the money you put in. Crypto is generally not covered by deposit protection or compensation schemes. Tax rules vary by country and change over time. Do your own research and consider independent advice before making any financial decision.