What Is a CEX?
A CEX (centralized exchange) is a trading platform run by a company that holds users’ funds in custody and manages order matching on their servers. It is the most common way for new users to buy and sell crypto.
How a CEX Works
Users create an account, complete identity verification, and deposit funds. The exchange then matches buy and sell orders through its internal order book. The platform holds the private keys to user wallets — you do not control your assets directly. Withdrawals are processed by the exchange and may be subject to limits or delays.
CEX vs DEX
A DEX (decentralized exchange) lets users trade directly from their own wallet with no account required and no custody of funds. A CEX offers more liquidity, fiat on-ramps, and customer support, but requires you to trust the platform with your assets. CEXes can freeze accounts, restrict withdrawals, or fail entirely — as several high-profile collapses have demonstrated.
Common CEX Features
Most centralized exchanges offer spot trading, futures, and staking products. They typically support fiat deposits via bank transfer or card, which is not available on most DEXes. KYC (know your customer) verification is required by regulation on any licensed CEX.
FAQ
CEX stands for Centralized Exchange. It is a trading platform run by a company that holds user funds and manages order matching.
CEXes are generally regulated and have security teams, but they are single points of failure. If the exchange is hacked or becomes insolvent, user funds may be lost. This is why many experienced users move assets to a self-custody wallet after buying.
A CEX is custodial: the platform holds your funds and requires ID. A DEX is non-custodial: you trade directly from your own wallet with no registration.
Yes. Licensed centralized exchanges require KYC (know your customer) verification by law. This usually means submitting a government ID and sometimes a selfie.
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