Centralized Exchange (CEX)
A company that runs an order book, holds your funds, and matches buyers with sellers for a fee.
Coinbase, Binance, and Kraken are centralized exchanges. You deposit money, they hold it, and you trade against other users through their matching engine. It's fast and easy, the on-ramp most people use to buy their first coin.
The catch is custody. The exchange controls your private keys, so a hack or an insolvency can lock you out. FTX collapsed in November 2022 with billions in customer funds gone. "Not your keys, not your coins" exists because of exchanges like that.
Related terms
An on-chain venue where smart contracts let users swap tokens directly from their wallets, with no custodian.
CustodyThe safekeeping of crypto assets and the private keys that control them, often handled by a regulated third party.
Proof of ReservesAn audit method by which an exchange shows it holds enough assets to cover what customers are owed.
CeFi (Centralized Finance)Crypto services run by companies that hold your funds and keys, much like a bank or traditional broker.