декодируйте поток файла с помощью UTF-8

var buffer = new char[32768] ;

using (var stream = new StreamReader (pathToFile, 
    new UTF8Encoding (true, true)))
{
    while (true)
    try
    {
        if (stream.Read (buffer, 0, buffer.Length) == 0)
            return GoodUTF8File ;
    }
    catch (ArgumentException)
    {
        return BadUTF8File ;
    }
}

@George2 I think they mean a solution like the following (which I haven't tested).

Handling the transition between buffers (i.e. caching extra bytes/partial chars between reads) is the responsibillity and an internal implementation detail of the StreamReader implementation.

using System;
using System.IO;
using System.Text;

class Test 
{
    public static void Main() 
    {
        try 
        {
            // Create an instance of StreamReader to read from a file.
            // The using statement also closes the StreamReader.
            using (StreamReader sr = new StreamReader(
                "TestFile.txt",
                Encoding.UTF8
                ))
            {
                const int bufferSize = 1000; //could be anything
                char[] buffer = new char[bufferSize];
                // Read from the file until the end of the file is reached.
                while (bufferSize == sr.Read(buffer, bufferSize, 0)) 
                {
                    //successfuly decoded another buffer's-worth of data
                }
            }
        }
        catch (Exception e) 
        {
            // Let the user know what went wrong.
            Console.WriteLine("The file could not be read:");
            Console.WriteLine(e.Message);
        }
    }
}