CEX
Last updated 17 October 2026Last verified 17 October 2026
What is a CEX (Centralized Exchange)?
Centralized Exchange. A custodial trading platform that holds user funds and runs an off-chain order book. Counterparty risk is the primary concern: the exchange can be hacked, mismanaged, or fraudulent. FTX demonstrated that "reputable" is not a substitute for segregated custody.
TradFi equivalentA broker-dealer holding client assets with the segregation question unanswered. Counterparty risk is the whole exposure, and FTX showed that reputation is no substitute for segregated accounts.