Is AAX Legal in US? Is AAX Safe?
Choosing a trustworthy cryptocurrency exchange is crucial as it directly impacts the safety and security of your digital assets. The high risk of scams in this area necessitates extreme caution from users.
Our analysts have noticed a growing interest in AAX services among users in the US. However, questions remain regarding its safety and legal status within the US. Traders Union experts have addressed this concern by crafting a detailed review that explores both the pros and cons of using AAX.
So, let us tell you if AAX is allowed in the US and if it's safe to use for trading.
Is AAX legal in US? Does it have a license?
Currently, the AAX is not regulated at the government level, which remains a common scenario in the cryptocurrency market. However, such platforms generally fall short compared to exchanges with Tier-1 regulation, which signifies oversight by top-tier financial authorities such as the FCA (UK), SEC (USA), or ASIC (Australia), ensuring strict compliance with security and operational standards. We compared AAX with two Tier-1 regulated exchanges to help you make an informed choice
| AAX | Bybit | MEXC | |
|---|---|---|---|
Tier-1 regulation |
No |
Yes |
No |
Government-regulated |
No |
Yes |
No |
Successful hacks |
No |
Yes |
No |
Cold wallet storage |
No |
Yes |
Yes |
Investor protection fund |
No |
Yes |
No |
2FA |
No |
Yes |
Yes |
Verification (KYC) |
No |
Yes |
Yes |
Open an account |
|
|
Short summary about the AAX exchange
AAX, operated by Atom International Technology Ltd., presents itself as a cryptocurrency exchange based in China. However, the platform's lack of proper regulation poses significant client risks.
Following the collapse of FTX and the ensuing market turmoil in November 2022, AAX abruptly suspended withdrawals. Despite assurances that client assets were safe, the exchange never resumed normal operations. To further complicate matters, Hong Kong authorities arrested two company executives a month later: Liang Haoming, a director and shareholder of Weigao Capital, and Thor Chan, the platform's founder and former CEO.
Recent investigations by blockchain security firm Cyvers revealed the suspicious movement of over ETH 24,000 which is approximately $55.6 million from wallets associated with AAX.
Given the evidence of mismanagement, fraud, and illegal activities, AAX has been blacklisted.
| 💰 Account currency: | Cryptocurrencies, fiat currencies |
| 🚀 Minimum deposit: | No |
| ⚖️ Leverage: | Up to 1:100 |
| 💱 Spread: | Market |
| 🔧 Instruments: | Cryptocurrencies, fiat currencies |
| 💹 Margin Call / Stop Out: | No |
AAX Pros and Cons
👍 AAX Pros:
•the exchange offers a large selection of popular cryptocurrencies and coins;
•spot and futures trading, futures with x100 leverage;
•low fixed commissions for trading operations and withdrawals;
•referral program with two types of bonus payments;
•the platform's own token, which makes trading more profitable;
•high level of information security (complies with CCSS);
•LSEG technology for trading with a delay of up to 90 microseconds;
•terminal in the browser, mobile application, API and FIX;
•high-quality and stable service with large trading volumes
👎 AAX Cons:
•no demo accounts;
•no call center;
•no license data is available.
Rules and Regulation
Crypto regulations in the U.S.
Cryptocurrency trading in the United States is regulated by various federal agencies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Additionally, certain states may have their own regulatory frameworks governing cryptocurrency activities, adding an extra layer of oversight to ensure compliance with applicable laws.
Crypto investor protection in the U.S.
Regulations enforced by the SEC and CFTC aim to protect investors participating in cryptocurrency trading activities. These regulations focus on enhancing market transparency, preventing fraudulent activities, and ensuring fair trading practices. Moreover, investor education initiatives and disclosure requirements contribute to empowering investors and mitigating risks associated with cryptocurrency investments.
Crypto tax in the U.S.
Profits generated from cryptocurrency trading are subject to taxation in the United States. The Internal Revenue Service (IRS) treats cryptocurrencies as property for tax purposes, meaning that capital gains received from cryptocurrency transactions are taxable. Tax rates on capital gains vary depending on several factors, including the individual's income level and the duration of holding the assets. Additionally, tax reporting requirements ensure compliance with tax laws and facilitate accurate tax calculations for cryptocurrency traders.
Do I recommend using AAX in the US?
The AAX cryptocurrency exchange will not be a good choice for traders from US. The company does not hold a license, although the main reason for that is that the financial regulator of the country does not license crypto exchanges in general. There have been security-related incidents on the platform, and the accounts are not protected in the best possible way. Also, users periodically have questions about the quality of the exchange’s operation.
FAQ
Can I work with crypto exchanges considering that they don’t have a license in US?
The fact that a crypto exchange does not have a license doesn’t mean that traders from US will have problems while working with it. Cryptocurrency exchanges are not subject to licensing in many countries, while there are many exchanges with good reputation. Assess the available information about the exchange and check its reputation.
What security methods for account protection do crypto exchanges employ?
Cryptocurrency exchanges may offer various security methods. These include the two-factor authentication, first and foremost, and also such methods as a security question, additional passwords, etc.
Can an exchange that has had a security-related incident in the past be trusted?
You need to check whether such incidents were regular. If it was one episode several years ago, while the reputation of the exchange is good, you can work with such an exchange.
Should I work with an exchange if I have doubts about its reputation?
No. Always choose the cryptocurrency exchanges that have a good reputation.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.