How to buy cryptocurrency safely in Serbia

A few notes before buying

1. Buying and selling cryptocurrency in Serbia is permitted under the Law on Digital Assets.
2. Buying crypto is generally cheaper than selling it. This is because you are giving real money, which is worth more than crypto and cannot increase tenfold as crypto can, so there is simply less of it on the market.
3. Learn a little about crypto scams before buying. Did you know that fake crypto exists?

Buying cryptocurrency as an individual

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*Verification (identity card) — Under the Law on the Prevention of Money Laundering and the Financing of Terrorism, since 29 June 2021 crypto exchanges have been required to confirm a user's identity (an identity card is required, along with questions about the origin of the money).

*Fee — Always check which exchange rate is used to calculate the fee. The middle exchange rate is the most favourable, while exchanges often use a worse rate for the user.

*Tax is paid if a gain is made (if you sell crypto and earn a profit), at a rate of 15% in Serbia, and a tax return must be filed. You therefore do not pay tax on the purchase itself.

Buying cryptocurrency as a legal entity

The situation for legal entities is somewhat more complex. It is best to contact us directly and describe your situation in detail so that we can direct you to the right person or company.

Buying Cryptocurrency Outside an Exchange

There are 3 ways to buy crypto outside an exchange. As shown in the table, we will cover each method.

Buying cryptocurrency by meeting in person (cash)

What it is: You meet the seller in a public place and exchange money for crypto (usually euros). The most important thing is to deal with verified people. If a larger amount of money is involved, you can meet in a currency-exchange office.
The greatest advantage of this method is complete anonymity. It is widespread here, and some people buy or sell continuously. Send us a message and we will connect you with someone near you.

When it makes sense: Always, unless it is urgent and you do not have time to arrange a meeting. The fee is agreed between you, but should not exceed 6%.

What you need to know: I recommend meeting only verified people. If you are meeting someone for the first time, always choose a public place covered by cameras. Cases in which people were robbed of enormous sums have already appeared in the news.
I also believe that, in this situation, people are still obliged to draw up a sale-and-purchase agreement showing the price so that capital-gains tax can be accounted for. In practice, I do not think this happens, and I think the state had that in mind when it legalized this form of exchange (OTC, or over-the-counter exchange).

Buying cryptocurrency through a crypto ATM

What it is: A crypto ATM is effectively an ATM that accepts your money and sends you crypto for a fee. The whole process takes 10 minutes on average. They are mostly installed in larger cities, and you must register with the ECD exchange before using one (an identity card or passport is required, as well as a video call with the exchange). The range of currencies you can buy is also limited: all crypto ATMs allow purchases of Bitcoin (BTC), Litecoin (LTC) and Ethereum (ETH). And the inconvenience does not end there—the first banknote inserted when buying must be RSD 1,000!

When it makes sense: If you urgently need cryptocurrency and are in Belgrade or Novi Sad.

What you need to know: This is the most expensive method, both for buying and selling. It is much better to know someone who regularly buys and sells—the so-called crypto dealers or “cryptomaniacs.”

Buying cryptocurrency by bank transfer to an individual

What it is: You send money through a bank to another individual, with an agreed fee or without any fee (which is exceptionally rare). The other party sends you crypto.

When it makes sense: When you need it urgently and do not want to register or leave your information with an exchange.

What you need to know: You must trust the other party. The party that sends money or crypto first may not receive anything in return.

Buying Cryptocurrency Through Crypto Exchanges

We will cover 3 ways to buy crypto through an exchange, following the table.

Buying cryptocurrency on an exchange

What it is: You register with an authorized exchange, domestic or foreign, verify your identity and pay by card or bank transfer. In Serbia, the authorized exchanges are ECD and Crypto12, and all trading there takes place in dinars. The best-known foreign exchange is Binance; people also use Kraken, CEX, MXC, OK Coin and others.

When it makes sense: If you urgently need money or there is no dealer in your area. It also makes sense if you are dealing with large sums for which you need proof of origin, for example when buying an apartment. Do not forget to file a tax return if you make a gain.

What you need to know: Use only an authorized exchange; otherwise you will be scammed. If you use a foreign exchange, you may have problems with domestic cards, and domestic banks may create difficulties because they do not like working with foreign crypto exchanges, which are unfamiliar and suspicious to them. If you choose this option, it is best to use domestic exchanges: they pay tax to the country in which you live, and in some way that comes back to you. In any case, there is no major price difference between domestic and foreign exchanges. Do not forget to report tax.

Buying cryptocurrency through an exchange intermediary (P2P)

What it is: You register with a foreign exchange (Binance, for example, is the best known), verify yourself with an identity card and a live facial image, then go to P2P (peer to peer) and find a person, usually a foreigner, offering what you need. The listed money-transfer methods—bank, Wise, PayPal and so on—almost always involve some form of online transaction. Here the exchange guarantees that everything will proceed correctly, although scammers also exist there.

When it makes sense: Rarely, mainly when you are in a foreign country and do not know any crypto dealers, the so-called cryptomaniacs. It is suitable only for smaller amounts because financial institutions, such as a bank or PayPal, may cause problems when larger sums are sent.

What you need to know: This method is for experienced traders because hidden costs and scams can easily arise. First the buyer—you—sends the money; after receipt is confirmed, the seller sends you the crypto, with everything happening inside the exchange. If your name on the exchange does not match the name on the bank account from which you sent the money, the other party may refuse to work with you.
The general rule is to avoid PayPal because of frequent scams, but when you are the seller the risk of fraud is lower because you are sending the money and will not ask for it back as scammers do.

Buying cryptocurrency through PayPal, Wise and similar services

What it is: PayPal and similar processors are for more experienced traders. Withdrawing money from PayPal and other platforms is very difficult—or expensive—but possible. If you have a significant amount, send us a message for advice. Broadly, there are two possibilities:
PayPal + a foreign exchange that supports PayPal
PayPal + sending money to another trusted individual who then sends it to your bank or gives you cash at an in-person meeting

When it makes sense: If you have money stuck on PayPal or in a foreign account.

What you need to know: Crypto purchases are limited to USD 1,000 per day. Beware of PayPal scams and send money only to verified people.

What Comes After Buying Crypto?

Buying crypto is not enough: you need to keep it safe, avoid scams and know what you will do with it.

Where should you store crypto?

There are several ways to store crypto safely. Choose the one that suits you best.

Keeping crypto on an exchange

Security level: The lowest of the available options because exchanges are vulnerable to hacking or bankruptcy. Today, the largest exchanges have stood the test of time, and some of them have never been hacked (Binance).

How to protect yourself: You cannot protect yourself from someone hacking an exchange or the exchange itself going bankrupt. Your funds there are not insured, unlike money that the state insures in a bank up to a certain amount. You can protect yourself only from malicious people by keeping your password safe, not giving your phone to just anyone and never giving your password to anyone, even if someone claims to work for the exchange.

Who it suits: People who trade relatively often and need money on the exchange so they can move from one currency to another. Do not leave money sitting on an exchange if you will not touch it for a long time.

Keeping crypto in a mobile app (crypto wallet)

Security level: Medium. Although your crypto is not on an exchange, it is on a phone connected to the internet, especially Wi-Fi, and malicious people may try to exploit that. Apple phones are harder to hack.

How to protect yourself: Keep the passwords for the app and phone “offline,” meaning not in electronic form, and keep them in several physically separate places. If someone learns the password to your app, the crypto is theirs, unless you have configured additional barriers in the app settings.

Who it suits: People who do not trade often, take care of their phone's security and do not have large sums in the account.

Keeping crypto in a cold wallet

Security level: The highest of the options mentioned because a “cold” wallet is connected neither to the internet nor to Bluetooth—hence the name cold—which makes a hacker's task exceptionally difficult.

How to protect yourself: Never photograph the master password, a sequence of 12–24 unrelated words, or keep it on an electronic device. Make several copies and hide them in several different places, in more than one building, because if your house burns down, for example, all the passwords will burn and you will be unable to access the crypto.

Who it suits: People who have larger sums in the account, do not touch that crypto often and do not pay attention to their own security.

Know what you will do with the crypto

People buy crypto for different reasons.

If you bought it to sell as an investment, set a clear price at which you will sell. If you keep money on an exchange, set a stop-loss order: automatically sell the crypto if it falls below a given price, thereby limiting your loss. Of course, the price can always rise again, and that is the gambling aspect of cryptocurrencies. It is important to have a strategy unless you are holding crypto for 5–10 years or longer. In that case, monthly price fluctuations do not matter to you, and I recommend ignoring them.

If you bought crypto to trade on an exchange, you could have done it with a demo account first. Take care of the security of your money on the exchange, including your passwords and access.

If you bought crypto to send it to someone or transfer money, do it intelligently. If you are in one of these situations, feel free to get in touch and explain it so that I can connect you with people who can help.