Term
CEX (centralized exchange)
A CEX (centralized exchange) is a crypto exchange operated by a company that holds user funds in custodial accounts, runs an internal order book, and matches trades off-chain — Binance, Coinbase, Kraken and OKX are canonical examples.
A CEX (centralized exchange) is a traditional-finance-style exchange for crypto: users create an account, deposit funds to a custodial wallet the exchange controls, and place buy/sell orders on an internal order book. Trades happen off-chain in the exchange's database; only deposits and withdrawals touch the blockchain. Because the exchange holds funds, it can match trades at very high frequency and offer deep liquidity — the top CEXes handle billions of dollars of daily volume.
The trade-off is trust. Users depend on the exchange to custody funds securely, to remain solvent, to allow withdrawals, and to not get compromised by hackers or regulators. History has shown all four of these can and do fail. FTX collapsed as a solvency failure; Mt. Gox and many others were hack failures; multiple exchanges have restricted withdrawals in various jurisdictions after regulatory pressure.
CEXes are the right tool when you need deep liquidity, fiat on/off-ramp integration, or advanced trading features (leverage, options, futures). They are the wrong tool when you want to avoid custody risk, want to skip KYC, or need cross-chain conversions without an internal deposit-then-withdraw cycle. Non-custodial swap aggregators like SwapZilla fill the gap between "trade on a DEX within one chain" and "trust a CEX for cross-chain."
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