CeFi (Centralized Finance)
Crypto services run by companies that hold your funds and keys, much like a bank or traditional broker.
CeFi covers the centralized side of crypto: exchanges like Coinbase and Binance, along with lenders and custodians. You open an account, pass identity checks, and the firm holds your assets. Trades clear on the company's internal ledger, not on-chain.
The trade-off is convenience for trust. CeFi is easy to use and often faster, but you do not control the private keys. When firms like Celsius and FTX collapsed in 2022, customers learned that crypto on a platform is really an IOU. Not your keys, not your coins is the warning.
Related terms
Financial services run by code on public blockchains, letting people trade or borrow without a bank.
Custodial WalletAn account where a third party holds your private keys for you, like a bank holding deposits.
KYC (Know Your Customer)The identity checks financial firms run to confirm who their customers are before opening accounts.
Self-CustodyHolding your own private keys directly, so no exchange or company stands between you and your crypto.