eToro vs Binance: Which crypto exchange is better?

eToro has 20 million users globally. Its customers can trade shares, commodities and cryptocurrency – with some advanced trading features to boot. It also offers its users access to crypto wallets and crypto debit cards.

Binance is one of the biggest crypto exchanges in the world, with 90 million users globally. But it’s known for offering controversial derivative trading on cryptoassets, which is banned in the UK.

Crypto is unregulated in the UK; there's no consumer protection; value can rise or fall; tax on profits may apply*.

Round 1: Vital statistics

Crypto isn’t regulated in the UK. But since 2020, the UK watchdog – the Financial Conduct Authority (FCA) – has been supervising cryptoasset firms operating from the UK for their compliance with anti-money laundering and counter-terrorism financing laws (AML/CTF). Firms which pass the FCA’s checks can be on its register; firms which don’t aren’t allowed to operate from the UK. The FCA has also banned the sale of derivatives on cryptoassets (for example futures contracts, contracts for difference and options).

eToro UK applied to become a registered cryptoasset firm and its application was granted. Binance’s UK arm, meanwhile, did not become FCA-registered, and Binance.com continued offering UK users derivative trading on cryptoassets. This led to Binance falling foul of the FCA in 2021. The FCA issued consumers a warning about Binance, and many UK banks started blocking transfers to the exchange. Since then, Binance has been taking steps to clean up its act.

Round 2: Supported coins

eToro supports most of the best known and most widely-traded cryptoassets, and that’s enough for many users. It’s also adding new cryptoassets to its platform on an almost weekly basis at the moment. For obscure altcoins, Binance has the edge.

Round 3: Supported fiat currencies

Again, most users will find the fiat support they need with eToro, but it’s worth noting that eToro does everything in dollars, so when you deposit funds it immediately gets converted from GBP to USD. That means you’ll incur a small FX fee of 0.4%.

Round 4: Costs

While Binance has the edge on spreads, its fee structure is complex and not entirely transparent. Deposit/withdrawal fees depend on which of the 600+ assets you’re transferring in/out. A GBP bank transfer in or out will usually cost £1 – not bad, except that your UK bank may block the transfer. If you have to pay in by card instead, it’s a rather painful 1.8% fee. As above, with eToro, you’ll pay a currency exchange fee from GBP as it operates in USD.

The verdict: Is eToro better than Binance?

We write lots of “vs” comparison guides, and we usually pick a winner. But in this race, there’s really only one horse – eToro. That’s because we won’t recommend a firm that’s offering services banned by the FCA – namely derivative trading on cryptoassets. Irrespective of that ban, derivatives are a very dangerous way to invest (you stand to lose more than you wager) and the underlying asset – cryptocurrency in this case – is notoriously volatile.

If you want to risk it all and use banned leveraged trades to bet on obscure altcoins (which we would not recommend) then Binance might appeal. But eToro has an impressive range of features in a slick app, plus all the cryptoasset support most of us are likely to ever need. The company’s trying to catch up, at speed, with its range of coins, too. Its main downside is those FX fees.

*Cryptocurrencies aren't regulated in the UK and there's no protection from the Financial Ombudsman or the Financial Services Compensation Scheme. Your capital is at risk. Capital gains tax on profits may apply.

Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.