centralizedexchange

A centralized exchange, or CEX, is a cryptocurrency trading platform operated by a centralized organization that provides custody of user funds, handles deposits and withdrawals, and runs the order matching and settlement processes. Users typically create accounts and complete identity verification before trading.

Most CEXs maintain an internal order book and matching engine that pairs buy and sell orders. When a match occurs, funds are reserved and settled on the exchange’s books. Withdrawals move funds from the exchange’s wallets to users’ external addresses, subject to security checks and withdrawal limits.

In addition to spot trading, many centralized exchanges offer services such as margin trading, futures and perpetual contracts, fiat on-ramps, staking, lending, and API access. They tend to provide user-friendly interfaces, higher liquidity, and a wide range of trading pairs compared with many alternative platforms.

Security and risk considerations are central to CEX operation. Because the exchange controls user funds, custody risk, hacking, insolvency, withdrawal freezes, and operational outages can affect users. Regulators in many jurisdictions require KYC/AML compliance and sometimes licensing, which can influence access and terms of service. Insurance coverage varies and may not be comprehensive.

Centralized exchanges contrast with decentralized exchanges, which generally do not custody funds and use on-chain mechanisms to facilitate trades. CEXs offer quicker execution, familiar interfaces, fiat trading, and deeper liquidity but require trust in the operator and adherence to regulatory obligations.

Users should assess security history, insurance coverage, withdrawal limits, fees (maker/taker, deposits, withdrawals), and customer support before trading on a CEX.