CEX

A CEX, or centralized exchange, is a crypto trading platform operated by a company that holds customer funds, maintains an order book, and matches buyers with sellers — much like a traditional brokerage. Users create an account, complete identity verification, deposit money or crypto, and trade on the exchange's internal systems. Coinbase and Binance are prominent examples: when you buy bitcoin on Coinbase, the trade happens in the company's database, and the exchange holds the coins on your behalf until you withdraw them to your own wallet.

Centralized exchanges are usually the entry point for newcomers because they accept bank transfers and card payments, offer customer support, and provide fast, cheap trading since transactions don't need to touch the blockchain until withdrawal. Many are regulated and licensed in the jurisdictions where they operate.

The key trade-off is custody: while your crypto sits on a CEX, you hold a claim against the company, not the coins themselves. The collapse of FTX in 2022 showed what can happen when an exchange misuses customer funds. A common misconception is that a large, well-known exchange is automatically safe — size is not the same as solvency, which is why the phrase 'not your keys, not your coins' remains a standard caution.