CEX (Centralized Exchange)

CEX refers to a centralized exchange, a platform that acts as an intermediary between buyers and sellers of cryptocurrencies. These exchanges are operated by a single company or entity, which controls the order book, matches trades, and holds user funds. Users deposit their funds into the exchange’s wallets, which are managed and secured by the platform.

Centralized exchanges offer a user-friendly interface for trading various cryptocurrencies, providing liquidity and ease of access to trading pairs. These platforms often require users to create accounts and complete a verification process to comply with regulatory requirements.

While CEXs are popular due to their ease of use and convenience, they also come with certain risks. Since the exchange controls the funds, users are reliant on the platform’s security measures to protect their assets. Centralized exchanges are also vulnerable to hacking and insider threats, leading to potential loss of funds for users. It is recommended to use CEXs for trading small amounts of cryptocurrencies and to withdraw funds to personal wallets for long-term storage.

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