What are Nested exchanges 

A nested cryptocurrency exchange operates by offering its customers crypto trading services through an account on another exchange, rather than facilitating direct trading itself.

- A nested cryptocurrency exchange provides its clients with cryptocurrency trading services through an account on another exchange. 

- It does not facilitate trading directly on the exchange itself. Instead, it acts as a bridge between users and other service providers. 

-Nesting is commonly used in traditional banking to provide services that a specific bank cannot, such as in the case of international transfers.

1. Your deposits have fewer guarantees on their safety than with a regulated exchange.

2. You might be supporting illegal activities that fund crime and terrorism.

3. Regulatory authorities may shut down the exchange, causing you to lose your crypto or other funds.

4. You could face legal repercussions from law enforcement if you knowingly work with an exchange that is involved with illicit activity.

How to detect a Nested Exchange 

1. Limited or Absent KYC/AML Checks

Nested exchanges typically have minimal or no KYC/AML requirements.

-  Beware of instant sign-ups without limits as a potential red flag.

2. Unclear Trading Interface

The user interface may not indicate where the actual trading occurs.

3. Lack of Explicit Trading Facilitation

Legitimate exchanges explicitly state that trading happens directly through their platform, not via nested accounts.

4. Aggregated Rates

The exchange presents multiple rates for selection, suggesting the use of nested accounts across different exchanges.

5. Follow the Trail

If you suspect using a nested exchange, track your cryptocurrency's path on the blockchain using a blockchain explorer.