At the start of cryptocurrency, most transactions were unregulated. Most transactions are peer-to-peer or unregulated markets, and only accessible to tech-savvy individuals who can write several lines of code. The place was filled with many con artists. It looked like the wild west of Fintech.
And this led to the initiation of a centralized crypto exchange (CEX). A place where people can make crypto transactions safe and easy. The platform was user-friendly and had excellent customer support, high liquidity, fiat integration and other features. This led to a new beginning marking the beginning of a new revolution.
What is centralized crypto exchange (CEX)?
Centralized Crypto Exchange is an online platform owned and operated by a single entity that can act as an intermediary to facilitate buying and selling and trading in the cryptocurrency domain.
CEX maintains information about users, provides security measures to users, manages your accounts and capital, and safely puts these funds in escrow. All CEXs are registered and regulated by the government. Implementing these procedures made them safer and robust, providing access and appeal across different demographics.
List of top 10 central exchanges
| Rank | exchange | Trading volume (24 hours) | average. Fluidity | Weekly visit |
|---|---|---|---|---|
| 1 | Binance | $21,732,060,182 | 936 | 11,362,965 |
| 2 | Bybit | $4,221,214,013 | 693 | 3,926,475 |
| 3 | Coinbase exchange | $3,093,814,921 | 794 | 41,582 |
| 4 | upbit | $2,779,740,036 | 588 | 1,834,098 |
| 5 | okx | $2,829,330,000 | 760 | 4,953,199 |
| 6 | BitGet | $3,947,339,506 | 695 | 4,183,545 |
| 7 | mexc | $4,153,744,523 | 742 | 6,413,763 |
| 8 | gate | $3,889,933,017 | 770 | 3,137,413 |
| 9 | Kucoin | $1,302,624,806 | 723 | 4,483,922 |
| 10 | Cooperatives | $3,820,897,962 | 530 | 4,846,825 |
Pros and Cons of CEX
Centralized cryptocurrency exchanges have actually changed the dynamics of the crypto market, but as every coin has two aspects, CEX has several advantages and disadvantages.
Benefits of CEX
1. Established structure
Almost every CEXS has an established structure that will make you trust your trade. This structure makes things simple and also brings some kind of peace to traders who know their funds are safe. It also operates under a strict set of rules and regulations.
2. Security
When it comes to protecting customer data and money, most of the top-class CEXS have invested heavily. From multifactor authentication to encryption, the platform uses and deploys a variety of security measures to keep criminals at bay.
3. Fluidity
Intensive exchanges usually have a wide user base to buy and sell different tokens in different variations, and therefore most CEXs have High fluidity. This liquidity allows investors to easily trade cryptocurrency at reasonable prices
Read again: Best Management Strategy to Trade 5 Best Risk Management Strategies
Cons CEX’s
1. Limited privacy
The main idea when cryptocurrency was created was to give it complete privacy, leave no paper marks, and be completely decentralized. However, when trading via CEX you will need to provide details and fill out KYC.
2. Centralized control
This centralized nature of the entire system comes with its disadvantages as it is managed by a single entity. That single entity controls the entire platform. This can lead to censorship issues.
3. Security Vulnerabilities
Centralized systems have the best security measures, but they are still vulnerable to hacking and many other security threats. A single security breach can lead to losses for both investors and platforms.
The difference between CEX and DEX
Centralized crypto exchange and Distributed Cryptographic Exchange. The main difference is that DEX is more private than CEX, and CEX is safer and more secure than DEX. Let’s take a closer look at them.
How CEX works
With regard to CEX, you deposit your tokens in the exchange wallet, and CEX maintains your funds until you trade. All orders are matched and created through the order book system that matches the buyer and seller.
CEX is beginner friendly and highly fluid and regulated, but the risk is to trust CEX with a private key, so if you’re hacked, you risk losing your funds. Most of them also have a transaction to withdrawal fee, which can reduce profits over time.
How Dex works
Dexs is a peer-to-peer platform where users connect directly to encryption. They run without intermediaries and rely directly on smart contracts for transactions. With regard to DEXS, transactions arise directly from the user’s personal wallet and do not require transfer of funds to the exchange. This adds an additional layer of security. This is because you don’t need to connect to third-party applications.
However, DEX is complex to begin with, difficult to use for beginners, and is less fluid, making it slower to run, especially with unpopular tokens.
Read again: Best Distributed Exchanges of 2025 (DEX)
Conclusion
Centralized Crypto Exchange is an online platform owned and operated by a single entity that acts as an intermediary to promote buying and selling and trading. DEX is the best cryptographic platform for amateurs as it is more complex and less fluid. If you are planning on trading, it is recommended that you keep another wallet connected to CEX and replenish your funds from time to time depending on your trading level.
FAQ
Yes, beginners can use CEX and it is the easiest platform to trade with beginners.
Yes, Binance is one of the CEXSs with high liquidity rates.
Trust wallets are not dex. This is a CryptoWallet with built-in DEX functionality
It is better to store it in a separate wallet for safety.
Yes, you can use fiat to purchase ciphers in most popular central exchanges.
