Anthony577_ Bailey

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What is a centralized crypto exchange (CEX)?

A centralized exchange (CEX) is a platform like Binance or Coinbase where a company manages user accounts, order matching, and custody of funds. CEXs offer user-friendly interfaces, fiat on-ramps, and customer support, making them popular for beginners. However, users must trust the exchange with their funds, which introduces counterparty risk. While many CEXs implement security features such as cold storage and insurance, history shows that hacks and insolvencies can still occur. Traders often use CEXs for convenience but should avoid storing large amounts long-term.