CEX (Centralized Exchange)

Centralized exchanges function similarly to traditional stock exchanges, providing users with an interface to buy, sell, and trade cryptocurrencies. Unlike decentralized exchanges (DEXs), CEXs require users to create accounts and trust the platform to custody their assets.

💡 Key Features of CEXs

• User-Friendly Interface – Offers intuitive dashboards, trading charts, and order management tools.
• High Liquidity – Typically provides deeper liquidity compared to DEXs, ensuring smooth trading.
• Regulated and Secure – Many CEXs comply with regulations and implement security measures like KYC (Know Your Customer) and AML (Anti-Money Laundering) policies.

🏛 Example 1: Binance

Binance is one of the largest CEXs, offering spot and futures trading, staking services, and a wide range of cryptocurrencies.

🏛 Example 2: Coinbase

Coinbase is a US-based CEX known for its beginner-friendly platform, allowing users to buy, sell, and store crypto assets with ease.

📚 References

• Binance Academy – What is a Centralized Exchange (CEX)?
• Coinbase Help Center – What does Coinbase do with my digital assets?

⚠️ Controversies & Misconceptions

• "CEXs are safer than DEXs" – While CEXs implement security measures, they remain vulnerable to hacks and regulatory actions.
• "Users fully own their funds on CEXs" – Unlike DeFi wallets, users must trust the exchange to custody their assets, which can be frozen in some cases.

🚀 Conclusion

Centralized exchanges play a crucial role in the crypto ecosystem, offering easy access to trading and liquidity. However, users should be aware of custodial risks and consider using hardware wallets for long-term asset storage.