GlossaryBeginner
Centralized Exchange
A company-operated platform that holds custody of funds and matches trades internally.
A centralized exchange, or CEX, is a company that operates a trading platform, typically holding custody of user funds and matching buy and sell orders through its own internal systems.
Centralized exchanges often offer more features and easier onboarding than decentralized alternatives, but they introduce custody risk, since users don't hold their own private keys while funds remain on the platform.
Examples
- Signing up for an account with a username and password to trade crypto typically describes a centralized exchange.
- Funds on a centralized exchange remain subject to that company's own security and solvency.