CEX: a Centralized Exchange

The On-Ramp Most Users Start With

A Centralized Exchange (CEX) is a trading platform run by a company that holds custody of user funds and matches buy and sell orders on a traditional order book. Coinbase, Binance, Kraken, Bybit, and OKX are the largest examples. You create an account, complete identity verification, deposit fiat or crypto, and trade with the click of a button. The exchange settles trades on its internal ledger, not on-chain.

CEXs dominate fiat on-ramps and high-volume trading. They offer deep liquidity, low fees, professional matching engines, advanced order types, and custodial wallets that work like a familiar online bank. They also run derivatives markets, margin lending, and staking products, which is why active traders often centralize most of their flow here.

The model has structural risks. Because the exchange holds your assets, you depend on its solvency, security, and honesty. History is full of failures—Mt. Gox, FTX, Cryptopia, and others have collapsed with user funds. Even healthy CEXs can freeze accounts, restrict withdrawals, or apply regulatory holds. The standard discipline is to use CEXs for trading and on-ramps but keep long-term balances in self-custody, summarized by the phrase not your keys, not your coins.