Centralized Exchange
A platform run by a company that lets users buy, sell, and trade cryptocurrencies through managed accounts and order books.
A centralized exchange, often called a CEX, is a cryptocurrency trading platform operated by a company or organization. It matches buyers and sellers, holds user accounts, and usually provides tools for deposits, withdrawals, market orders, limit orders, and price charts. Many centralized exchanges also support fiat currency payments, so users can buy crypto with bank transfers, cards, or other traditional payment methods.
Centralized exchanges matter because they are often the easiest entry point for people new to crypto and can offer high liquidity, fast trade execution, and customer support. The tradeoff is that users typically rely on the exchange to custody funds while they are on the platform, meaning the exchange controls the private keys until assets are withdrawn to a personal wallet. For example, using a centralized exchange is more like using an online brokerage account, while using a decentralized exchange is closer to trading directly from your own wallet without an intermediary.
Other terms in CeFi
CeFi
Centralized finance is crypto services run by companies that custody assets, manage accounts, and provide trading, lending, or yield products.
Crypto Loan
A loan that uses cryptocurrency as collateral or provides borrowed crypto or cash through a crypto lending platform.
Custodian (Crypto)
A crypto custodian is a service that holds and safeguards digital assets or private keys on behalf of users or institutions.
Margin Trading
Borrowing funds on an exchange to open a larger crypto position than your own balance would allow, increasing both potential gains and losses.